SEOUL – The South Korean LG Electronics Inc says it is halting production of its smartphones so that it can focus on other areas, such as electric cars, the company said in a statement, reported Sputnik.
“The decision was approved by its board of directors earlier today,” the statement today read, adding that “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”.
The company said the current LG phone inventory will continue to be available for sale, but the mobile phone business is expected to fully wind down by July 31.
“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,” the company said.
LG Electronics was once considered a pioneer of the Android operating system, collaborating with Google on the Nexus series in the early 2010s, AFP reported.
But it has long struggled to increase sales, entering the market late and facing tough competition from emerging cheaper Chinese rivals such as Huawei.
It was regularly listed among the world’s top 10 smartphone manufacturers but according to tracker Counterpoint, the last time it recorded a global market share of 3% or more was in the second quarter of 2018.
The unit has recorded losses for 23 consecutive quarters since 2015, with the cumulative deficit reaching about 5 trillion won (RM18.2 billion) by the end of last year.
LG reportedly held talks with Vietnam’s Vingroup over a potential sale, but it broke down over price differences, according to local reports. – Bernama, April 5, 2021
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