LG confirmed today that it is exiting the smartphone business. The move will enable the company to concentrate on areas such as electric vehicle components, connected devices, smart homes, robotics, & artificial intelligence.
Today, LG confirmed that it will exit its smartphone business. It added that it would enable the company to focus resources on its emerging growth areas, such as electric vehicles, connected devices, smart homes, robotics, artificial intelligence and business-to-business solutions.
There will be no layoffs, but LG has stated that details regarding the job situation may be determined at the local level. Existing LG phones will remain on sale, and the company will continue to support them for a period of time that will vary by region.
According to LG, it expects to close this division by the end of July, which has been something rumoured for some months. The division has posted huge losses for the past five years.
Despite having been considered to be in direct competition with Samsung until recently, LG’s high-end smartphone line has struggled to meet the company’s high standards. On the other hand, its affordable lineup is in fierce competition with Chinese rivals.
A year ago, the company said it would bring its smartphone division to profitability by 2021. LG’s announcement means it’s unlikely to release its long-teased rollable phone.
This year’s virtual CES was the last time the company displayed the device when it claimed that the device was real and would be available later this year.
Since at least the beginning of this year, LG has been mentioned as considering exiting the smartphone market. Although a company spokesperson called the former report “not true and without merit,” an LG official told The Korea Herald later that the company had to make a “cold judgment” on the division.
The official at the time said that potential measures could include the sale or withdrawal of the smartphone business and downsizing.
The company’s smartphone division was to be shut down due to stalled talks regarding a buyer, news outlet DongA reported in March. In addition, the company was to cease the development of its upcoming phones with rollable displays by the first half of this year.
In response to losing market share, LG began releasing eye-catching devices with unique form factors. There was the LG Wing with its rotating display revealing a secondary screen beneath it, or the dual-screen devices it released in the recent past.
Similarly, LG also explored the modular smartphone market with its LG G5 but was forced to drop the project a year later.
All of these features, unfortunately, were not useful enough to make LG’s phones mainstream hits, and the company’s cheaper, older phones fell behind their competition in core areas like camera performance.
LG joins a long list of high-profile devices makers that have abandoned smartphones, although many of the brand names have emerged on third-party devices.
HTC still sells a few oddball devices since it sold most of its IP to Google in 2017. Nokia still has its consumer-facing brand on devices made by HMD, while Blackberry’s name would appear in a device from OnwardMobility this year.
