South Korean company LG Electronics Inc. officially announced the closure of its mobile division due to unprofitable work and high competition, according to a statement on the company's website dated April 5, 2021. As noted, the board of directors has already approved the decision. The mobile unit of LG will cease to exist by July 31, 2021.
Rumors about LG's intentions to exit the smartphone market have been circulating for a long time. Earlier, the company was negotiating the sale of its mobile division with several potential buyers at once. The company discussed the mobile unit's sale to the Vietnamese corporation Vingroup and the German carmaker Volkswagen, but no agreement was reached. LG also failed to sell the mobile business in parts.
Therefore, the news was not unexpected. Back in late March, it became known about LG's plans to stop producing smartphones. It was reported that the company had already frozen the development of flexible display phones. Besides, all the presentations of new smartphones previously planned for the first half of the year were postponed.
In an official statement, LG says that the closure of the respective division will allow the company to focus on other areas, including smart home devices, artificial intelligence systems, robotics, components for electric cars, as well as various related services.
“LG's strategic decision to exit the incredibly competitive mobile phone sector will enable the company to focus resources in growth areas such as electric vehicle components, connected devices, smart homes, robotics, artificial intelligence and business-to-business solutions, as well as platforms and services,” reads the statement.
LG's exit from the smartphone market will not be instantaneous but gradual. While there still are smartphones in stock in warehouses, you can buy the manufacturer's smartphones from old batches, so no one will withdraw them from sales. In addition, LG will continue to provide service support and release software updates for existing models until the end of their lifecycle.