According to LG, the mobile phone business wrap up is likely to be completed by July 31. However, there is a possibility that the inventory of some of its existing models may still be available after July. LG Electronics’ stock closed down 2.5% in South Korea after this announcement.
Why LG stopped making phones?
The decision to wrap up mobile business came after a constant decline in the profits. LG had already warned about the fate of its phone business in January, saying that it was looking at all options, including a potential sale of the unit. At the beginning of 2019 it reported an overall loss of $72.5 million in the three months prior — much of that driven by its failing mobile division which saw sales drop by 40 percent throughout 2018. In 2020, the company’s CEO Kwon Bong-seok said, “LG Electronics mobile business is going to be profitable by 2021.” It then came up with its rollable display phones – Velvet and Wing, but these dual screen phones failed to capture the consumers’ interest. The company has not done enough to steal Apple and Samsung loyalists. LG’s inability to improve its smartphone business is partly influenced by a global semiconductor storage. Also, it dwindled in popularity, particularly as Chinese upstarts such as Xiaomi and Oppohave surged around the world. Furthermore, Samsung, the biggest domestic rival, LG does not manufacture its own chipsets. Moreover, the inadequate supply has resulted in the company struggling to attain the needed silicon supply for future mobile devices.
Focus on B2B & Robotics
The exit from the smartphone market will help the electronics company shift its focus towards creating electric vehicle components, connected devices, robotics, smart homes, artificial intelligence and business-to-business solutions, along with platforms and services. The company has decided to retain all the technologies it developed for its smartphones and use it in creating future products. LG also said that it will continue to develop mobility-related technologies such as 6G.
Latest LG Smartphones
LG was a smartphone pioneer in the starting. The company has always been willing to innovate and offered consumer friendly phones that were not only easy to use but also friendly on the pocket. The company was known for pushing the envelope with its smartphones. In 2013, it came out with a curved smartphone screen, making it one of the first electronics makers at the time to debut the technology for the mass market. Two years later, it left everyone in awe with the high-end photo-taking capabilities of its LG G4.
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