South Korea’s LG Electronics Inc on Monday proclaimed it is discontinuing the smartphone business. In an official statement, the company stated that the decision to shut down its loss-generating mobile department will allow the company to concentrate on the growth of resources.
These growth areas for LG include electric vehicle components, connected devices, smart home products, robotics, artificial intelligence, and business-to-business solutions among other products and services. This verdict has arrived days after LG showcased its ambitious rollable phone at the CES 2021.
Moreover, the company’s decision to pull out will leave its 10% share in North America, where it is the third-largest brand, to be crammed up by Samsung Electronics and Apple Inc where its local competition is expected to have the edge.
An analyst at Hi Investment & Securities, Ko Eui-Young has stated that in the United States, LG has targeted mid-priced models, which means that Samsung, which has more mid-priced product lines than Apple, will be better equipped to attract LG users.
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Moreover, LG has stated that the situation of its workers of phone business will be decided at the local level. Earlier this January, few reports had emerged stating that the LG was contemplating selling its smartphone business. In the very month, the firm announced it would launch a rollable phone this year. However, it can be concluded that all the efforts to keep the business stay afloat failed.
“Moving forward, LG will continue to leverage its mobile expertise and develop mobility-related technologies such as 6G to help further strengthen competitiveness in other business areas. Core technologies developed during the two decades of LG’s mobile business operations will also be retained and applied to existing and future products,” it said in a statement.
The inadequate financial performance of LG’s smartphone business has been publicly known for several years. Similar to countless other Android smartphone vendors, LG has grappled to turn things around.
Source: TechCrunch
