South Korea’s LG Electronics will close its lossmaking smartphone business after years of struggling to compete against rivals ranging from Apple to low-cost Chinese upstarts.
The Seoul-based group announced on Monday that it would formally exit the industry and instead focus on growth areas such as vehicle components. LG has lost ground in smartphones as the global market has become more saturated. It has also faced pressure from cheaper Chinese competitors in the low-to-mid end segment while being outmanoeuvred by Apple and local rival Samsung Electronics in the premium part of the market.
LG said in a statement: “LG’s strategic decision to exit the incredibly competitive mobile phone sector will enable the company to focus resources in growth areas such as electric vehicle components, connected devices, smart homes, robotics and artificial intelligence.”
The company revealed its highly anticipated ‘Rollable’ smartphone earlier this year at CES 2021.
It was even the third largest smartphone maker in the world in 2013 and still ranks as third most popular in North America.
However, bosses have blamed the “incredibly competitive” phone market for the company’s decline.
We now won’t see the LG Rollable come to market or any of its other rumoured devices as the entire LG smartphone business unit will close.
In 2020, LG shipped 28 million smartphones while rival Samsung is said to have shipped over 250 million.
This isn’t the end for LG as a tech brand though.
It’s the second best-selling TV brand across the globe and is a strong competitor with Samsung in this area.
LG will continue to sell and make home appliances and work on its joint venture with Magna International to make electric car parts.
It also has plans to work on a 6G network.
What will happen to LG phone owners?
If you use an LG smartphone there is no need to panic.
The company will still provide software updates and support for existing customers for varying periods that depend on customer location.
We have reached out to LG for more clarity on this. LG won’t be creating or launching any new smartphones but some of the current LG range of phones will still be avaliable to buy.
As long as LG is still selling phones, it should still be providing customer support. Things aren’t expected to fully wind down until July 31.