Finally, LG getting out of smartphone business. Once third largest cell phone manufacturer in the world is giving up. LG Electronics will no longer produce smartphones in the future. Rumors have been spreading for months, and on Monday, April 5th, 2021, it was officially confirmed.
The smartphone market is highly competitive. The South Korean electronics company LG is pulling the ripcord and is getting out of business. LG uses a press release to let the world know that they won’t continue the business of mobile devices such as smartphones and tablets. Instead, the company focuses on the other growing areas, such as electric vehicles, IoT, and artificial intelligence.
When the South Korean electronics manufacturer LG presented the G5 as its new top smartphone five years ago, there was great enthusiasm. But the disillusionment came quickly. Software and hardware breakdowns combined with slow software updates meant that the once famous brand continued to fall in favor of mobile phone users. Now LG has decided to stop manufacturing smartphones.
A loss of $ 4.5 billion
LG has been making losses on smartphones for years, total $ 4.5 billion in the past six years. LG was one of the largest smartphones manufacture a few years back, just after Samsung and Apple. According to the market research company Counterpoint. But, only around 23 million LG cell phones were shipped worldwide in 2020. On the other hand, Samsung sold 256 million smartphones last year.
Since LG’s smartphone division has been making losses for years. Revenue for the full year 2020 was $ 4.66 billion. At the same time, the operating loss for the entire year was $750.63 million. In the fourth quarter alone, took down 9.2 percent than the previous quarter. According to the electronics company, the reason for this is the lack of 4G chipsets and sluggish sales of premium smartphones in the overseas markets.
LG getting out of smartphone business: It’s over in summer
They are expecting that the mobile communication business will be completed by next July 2021. However, the current LG phone inventory is still available for sale. The company also offers its customers over a certain period of time; they will continue to service support and software updates. Also, they work closely with their suppliers and business partners throughout the entire process.
With the closure of the smartphone sector, the company intends to concentrate its resources on growth areas such as the production of components for electric vehicles, networked devices, smart homes, robotics, and artificial intelligence (AI) in the future. Core technologies developed in LG’s two decades of mobile business operations are also retained and applied to existing and future products.
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