LG is a South Korea based electronics company, which is very well known across the nations. It has incurred heavy losses of around $4.5 billion for the past 6 years. Hence, now the LG Electronics has made a statement that they are going to shut down their smartphone business. This decision was approved by the board directors also.
LG was talking about options for divisions in the January. The areas of potential incremental growth like connected devices, electric vehicle components, robotics, business to business solutions, artificial intelligence and smart homes will be focussed more now as the company has exited its mobile sector. The company’s 7.4% revenue has been accounted by smartphones. Its global market share is 2%. As per the company there will not be any potential layoffs, but details associated with employment will be determined at the local level.
Depending upon the varying regions, LG has put the existing stock of phones on sale with software support and updates for a period of time. It also will work collaboratively with suppliers and business partners throughout the closure of the mobile phone business. LG was the largest smartphone marker in 2013, with multiple innovations like ultra-wide-angle camera. Then it has suffered both hardware and software issues and incurred heavy loss. LG will continue to leverage its mobile expertise and develop mobility related technologies such as 6G to help further strengthen competitiveness in other areas of business. Their 2 decades of work in Core technologies will also be retained and applied to existing and future products.
In North America LG ranks as the third most popular brand, but it didn’t get the same reception in other markets. This decision to pull out will leave its 9 percent share in North America, in December 2020 as per a Counterpoint Research. In 2020, the company had shipped 28 million phones as per the statement from the company. By July 31, the details of the smartphone business will be completed. Although, inventory of some existing models may still be available after that. This move makes it the first major smartphone brand to withdraw from the market.