LG Electronics to shut down its mobile business after 26 years of operation

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It's the end of an era.
South Korean tech giant LG Electronics is shutting its mobile business for good.
The company says the division that's been around for over a quarter of a century, but has losing money for years on end will cease to be at the end of July.
However, LG is keen to avoid massive job cuts;... instead deploying the workers to LG's other sub-divisions.
Eum Ji-young has more.
Remember this? This LG rollable phone with a smoothly expanding screen made a splash at CES in January.
Little did we know then that THAT would be the last of it.

After 26 years of staying in the business, South Korea's LG Electronics is shutting down its loss-making mobile division... a move that's set to make it the first major smartphone brand to completely withdraw from the market.

The tech giant confirmed on Monday that it will end production and sales of mobile phone products on July 31st.
Instead, the company plans to focus resources on growth areas including EVs, smart homes, robotics and artificial intelligence.

Phones constituted 8-point-2 percent of LG sales last year and there will be a short-term loss of revenue but the company expects the closure to be financially favorable in the long run.

"Currently Samsung Electronics and Apple are the two most dominant players in the global smart phone market and Chinese firms are growing fast. Amid rising competition, the company seems to have chosen to focus on electric cars, future mobility and premium home appliances instead of mobile phones."

The company said the division's roughly 37-hundred employees will be moved to other LG Electronics businesses and affiliates with industry sources expecting partial transfers to its joint corporation with Magna International.

Although LG was one of the pioneers in the market with a number of cell phone innovations including ultra-wide angle cameras and at its peak in 2013, the world's third-largest smartphone manufacturer, its smartphone division has not made profit since the second quarter of 2015 and logged nearly six years of losses totaling some 4-point-5 billion U.S. dollars.

The firm reportedly held talks over a potential sale but negotiations failed due to big differences in valuing technology patents.

LG Electronics made clear that it will provide service support and software updates for customers of existing mobile products for a period of time to minimize any inconveniences.
Eum Ji-young, Arirang News.

#LG #Economy #mobile_business

2021-04-05, 19:00 (KST)
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