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LG Electronics Announces Exiting the Mobile Phone Business | Economy | News

The South Korean company will dedicate its efforts to the manufacture of electric vehicles, 6G technology, robotics, home automation or artificial intelligence.

LG Electronics, once one of the largest mobile phone manufacturers, announced today that it will stop manufacturing these devices due to the growing competitiveness of the sector and after this branch of business has generated a deficit in the last five years.

The South Korean company made the decision public, approved this Monday by its board of directors, through a communication to the South Korean stock regulator.

In a subsequent statement sent to the media, the company explained that it is leaving the “incredibly competitive mobile telephony sector” to focus its resources on areas where it sees growth potential such as components for electric vehicles, 6G technology, robotics, home automation or artificial intelligence.

The company also indicated that its currently available inventory will remain for sale and that “LG will provide service support and software updates for customers of existing mobile products for a period of time that will vary by region.”

LG expects “the liquidation of the mobile phone business to be completed by July 31, although inventories of some existing models may still be available after that date.”

Accumulated losses

“LG will work closely with vendors and partners throughout the closing process of our mobile phone business. Details regarding templates will be determined locally,” it added in the statement.

Going forward, the Seoul-based company promised to continue to make use of “core technologies developed during the two decades of mobile business operations” to apply to “existing and future products.”

The decision comes after the company pointed out in its last earnings presentation in January that the future of this division, in the red since the second quarter of 2015 and with accumulated losses worth about 5 trillion won (about 4,434 million won). dollars), was open to “any possibility.”

LG, which at the beginning of the last decade became the world’s third-largest mobile phone maker behind only Samsung and Apple, currently occupies the ninth position, with just a 2% global market share, according to the consultancy Counterpoint Research. (I)

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