• Thursday, March 28, 2024
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LG exits phone-making market to focus on electric vehicle

LG exits phone-making market to focus on electric vehicle

The smartphone world will have to move on without LG Electronics, but it would always remember some its bold innovations some of which worked and some that did not.

The South Korean technology manufacturer, in a statement on Monday, said it was exiting the mobile phone sector to enable it to deploy its resources in growth areas such as electric vehicle (EV) components, connected devices, smart homes, robotics, artificial intelligence, and business-to-business solutions, as well as platforms and services.

However, the real reason LG is exiting may well be losses. In January, LG said it was looking at all options for the division after almost six years of losses totalling around $4.5 billion. In 2020, the company was only able to ship 28 million phones compared to 256 million for Samsung, data from Counterpoint shows. Of the five divisions at LG, the smartphone business is the smallest, bringing in 7.4 percent revenue only. The company only owns a 2 percent market share of the global mobile phone market.

In the meantime, LG is not giving up on its mobile technology ambitions.

“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 company said in a statement.

In the good times, LG was one of the first to hit the market with exciting models like the ultra-wide-angle cameras; LG Prada, or KE850 which cemented its high-profile paring with the Prada fashion brand; the LG G Flex, one of the early curved phones that used a flexible OLED panel. That meant one could bend the phone a little without it getting damaged. At one time in 2013, it was the world’s third-largest smartphone manufacturer behind Samsung and Apple.

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LG’s flagship models suffered mostly from software and hardware mishaps which combined with slower software updates. The company’s marketing strategy which lagged behind its Chinese competitors may have also contributed to the losses and eventual demise of the company from the mobile phone market.

The exit does not affect current owners of LG mobile devices just yet. The company’s mobile devices remain on sale in stores and online, and service support and software updates will continue for existing LG phone customers. However, there would not be any new LG smartphone going forward.

LG plans to complete the wind-down of its mobile phone division by July 31. The South Korean company still has a strong consumer electronics business, especially with home appliances and televisions. It is the second best-selling TV brand in the world after Samsung.