LG Shuts Mobile Business

As we once reported that LG was in the process of shutting down the mobile communication business rather than selling it, a few people may have not believed it for two simple reasons. The first one being that the company hadn’t confirmed such news, and secondly, the brand’s popularity; But always remember that it’s a numbers game, not a popularity contest. Well, to ease your conscience, it’s been confirmed; LG is certainly shutting down its mobile business. With losses continuing to mount, and billions of dollars seemingly squandered on quirky handsets, the electronics giant has officially thrown in the towel on its struggling phone division. In a statement, the company said “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.”

For now, LG said that its current phone inventory remains available for sale, and that existing devices will continue to receive after-sale support and software updates “for a period of time which will vary by region.” The company expects to complete the winding down of its mobile business by the end of July, though it notes that some LG phones may continue to be sold after that date.

Despite its CEO’s pledge to turn around its fortunes by 2021, both LG’s Velvet and Wing devices failed to gain traction with the public. The lure of dual-screen phones (and the promise of rollable displays) was clearly not enough to prompt consumers to part ways with dominant players Apple and Samsung. While the litany of affordable flagships from the likes of OnePlus and Xiaomi continued to chip away at what remained of its market share.

By December, the writing was on the wall for the Korean electronics giant. With its stake in the global phone market down to a paltry 1.7 percent, LG announced it would outsource the designs of more of its low- and mid-range handsets to third-parties. Just months earlier, it had attempted to crack the cheap 5G phone arena with the $400 K92. 

“LG brand’s departure from the mobile space may be disappointing to some but we’re in an industry where pivoting and doing what’s in the best interest of employees and shareholders is also critically important,” LG head of global corporate communications Ken Hong told Engadget. “As other beloved phone brands have demonstrated before us, it’s a numbers game, not a popularity contest.”

Clearly, LG was not ready to give up on its smartphone ambitions without a fight. Last month, Korean newspaper Dong-A Ilbo reported that it was even in talks to sell the flailing business to Germany’s Volkswagen AG and Vietnam’s Vingroup JSC, but the discussions ultimately failed. According to Nikkei Asia, LG’s inability to ramp up its smartphone business was influenced at least in part by a global semiconductor storage — unlike its domestic rival Samsung, LG does not produce its own smartphone chipsets, and limited supply has meant the company has struggled to secure an adequate supply of silicon for future mobile devices.

LG’s full statement can be found below:

“LG Electronics Inc. (LG) announced that it is closing its mobile business unit. The decision was approved by its board of directors earlier today.

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.

Current LG phone inventory will continue to be available for sale. LG will provide service support and software updates for customers of existing mobile products for a period of time which will vary by region. LG will work collaboratively with suppliers and business partners throughout the closure of the mobile phone business. Details related to employment will be determined at the local level.

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.

The wind-down of the mobile phone business is expected to be completed by July 31, although inventory of some existing models may still be available after that.”