SEOUL, South Korea: LG Electronics said on Monday it would close down its loss-making smartphone business.
In January, the South Korean electronics giant said it was looking at all options for the division after almost six years of losses totalling around $4.5 billion (£3.3 billion).
LG had made many innovations including ultra-wide-angle cameras, rising to the third-largest smartphone maker in 2013.
But bosses said the mobile phone market had become “incredibly competitive”.
While Samsung and Apple are the two biggest players in the smartphone market, LG has suffered from its own hardware and software issues.
As LG struggled with losses it had held talks to sell part of the business but these fell through.
It still ranks as the third most popular brand in North America but has slipped in other markets.
LG phones are still fairly common in its domestic South Korean market.
“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 and artificial intelligence,” it said in a statement.
Last year it shipped 28 million phones, which compares with 256 million for Samsung, according to research firm Counterpoint.
The smartphone business is the smallest of LG’s five divisions, accounting for just 7.4% of revenue. Currently, its global mobile phone market share is about 2%.
It has been innovating its phones to compete with its bigger rivals, with last year’s launch of the T-shaped Wing, a smartphone with a larger screen that swivels out to reveal a second, smaller one underneath.
LG still has a strong consumer electronics business, particularly with home appliances and televisions. LG is the world’s second best-selling TV brand after Samsung.
In December it launched a joint venture with automotive supplier Magna International that will make key components for electric cars.
LG’s phone inventory will continue to be available for sale, and it will still provide service support and software updates for existing customers.
The divisions are expected to be wound down by the end of July.
“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,” a spokesman added.
Analysts said South Korean rival Samsung and Chinese companies such as Oppo, Vivo and Xiaomi are likely to benefit the most from LG’s exit.
Smartphone makers struggled during the pandemic with sales down about 10% in 2020 mainly due to lockdowns limiting store openings.
The company says that it will continue to roll out the Android 11 OS update for supported models as previously announced.
LG is planning to roll out an update to Android 12 for some devices. However, they warn that their OS upgrade plans may be adjusted based on Google’s distribution schedule and the performance of each device while testing the update. Should there be any major issues with the Android 12 update during testing, there’s a chance that LG will drop plans to release the update.
To date, LG has rolled out the Android 11 update to a handful of its devices, including the Velvet, V60 ThinQ, and most recently, the G7 One. Other phones expected to get the update later this year include the G8X, G8S, Velvet 4G, Wing, K52, and K42. If the company does actually manage to roll out an Android 12 update, then expect it to land only on its flagship phones that launched with Android 10, such as the Velvet, V60 ThinQ, and Wing.