LG has announced that it is moving out of the smartphone space after years of underperforming major brands like Samsung and Apple. The company said that the decision will allow it to focus on “high growth areas such as electric vehicle components, robotics, smart homes, and others.” The company has also said that it will be expanding its business-to-business solutions as well as its investments in artificial intelligence.
LG also noted that all existing LG smartphones will remain on sale adding that it will continue to also provide support for them. The company did, however, say that the support will only be for a “period of time” which will vary depending on location. It is expected that the move will lead to massive layoffs at the company.
However, LG has refused to openly address the issue saying that any employment issues related to this decision will be dealt with at a local level. If everything goes to plan, the Korea-based company is hoping to completely shut down its smartphone business by July this year. Despite this, the decision is not a surprise for people who have been following LG over the last few months. There were already credible rumors that the company was planning to shut down its smartphone business. And it’s not also hard to see why.
Over the last five years, LG’s smartphone division has continued to report huge losses. Although there was a time the company competed on equal footing with Samsung in the Korean smartphone market, of late some of its high-end devices have failed to attract any significant success. Instead, they have fallen behind in the shadow of Samsung which continues to dominate both the local Korean smartphone industry and the global one as well.
LG's initial plans were to make the smartphone division profitable by the end of 2021. But it seems like this goal will not be achieved. There is also doubt about any future LG releases. But one that we should note is the highly anticipated rollable phone from the company. The plan was to have it released this year but with current developments, it’s highly unlikely that the smartphone will ever see the market.
Early this year, just as rumors of a possible shutdown of the smartphone division sprung up, LG denied that it had any such plans. But the company’s stance softened as the year went on. Just last month, the company finally admitted that in light of the massive losses suffered by the smartphone division, it was planning to unwind operations or sell the entire division.
There were even some reports that LG was very close to finding a buyer but things didn't work out. Nonetheless, the company had tried to release a series of eye-catching devices in an effort to catch up with its rivals. LG even tried to offer a modular smartphone with its LG G5 but it never managed to launch the device into the market. The company now joins a list of high-profile tech giants to exit the smartphone market due to brutal competition.