LG to shut down mobile division

LG to shut down mobile division

LG Electronics Inc., one of the pioneers of the Android operating system has confirmed that it will shut down its loss making mobile division and shift focus to future projects such as electric vehicle components, connected devices and smart homes.

LG’s mobile division, the smallest of its five divisions accounted for 8.2% of sales in 2020 and the company will stop all production and sales of mobile phone products on 31 July 2021.

The pull-out will leave Samsung and Apple to fight for the 10% market share that LG has in North America as it is the third best brand in the region.

Earlier this year, LG said it would review the direction of its smartphone business and according to local media reports, the company held talks for a potential sale but nothing materialised as there were differences in valuing technology patents.

LG’s smartphone division has been underperforming for a straight six years with losses totalling $4.5 billion over the period.

At its peak in 2013, LG was the world’s third-largest smartphone manufacturer behind Samsung and Apple.

However, over the years, its flagship models suffered from both software and hardware mishaps which combined with slower software updates saw the brand steadily slip in favour.

After the shut down, LG will continue to provide service support and software updates for customers of existing mobile products for a period of time which will vary by region.

Employees from the company’s mobile division in South Korea, will be moved to other LG Electronics businesses and affiliates, while elsewhere decisions on employment will be made at the local level.

LG has been expanding its vehicle components business and partnered with Magna International Inc. for a joint venture to make key parts for Electronic Vehicles.