Mobile business unit had racked up 23 straight quarters of loss
LG Electronics is ending its smartphone operation after 23 consecutive quarters of loss.
The company said on Monday that it held a board meeting and decided to end its mobile business unit by July 31.
The Korean firm said it decided to exit the mobile phone sector to focus its resources in growth areas such as electric vehicle components, connected devices, smart homes, robotics, artificial intelligence and business-to-business solutions.
LG Electronics failed to react adequately to intensifying competition in the mobile phone market, it added.
The firm’s mobile business unit, called Mobile Communications Company, has been posting an operating loss every quarter since the second quarter of 2015 up to now. Its accumulated operating loss in the time period was around 5 trillion won.
Earlier on January 20, LG had said it was reviewing the future of the business unit which was open to all possibilities.
The company reportedly held talks with Vingroup of Vietnam and Volkswagen of Germany to sell its mobile business unit. However, they couldn’t come to terms. Volkswagen was also interested in LG’s patents and researchers.
The Korean company will be manufacturing mobile phones up to the end of May. This is being done to keep its commitments to mobile carriers and suppliers.
LG said it will be offering software and service support for phones that are already commercialized.
Current staff at its mobile business unit will be transferred to other business units or sister companies.
The company stressed that it will be continuing researchers in mobile-related technologies such as 6G, camera and software. These will complement its TV, home appliance, car component and robotic businesses, LG said.
These researches will be done under the supervision of the CTO. LG will secure core technologies related to 6G, which is expected to standardized in 2025 and commercialized in 2029, the company said. It will prepare for ambient Internet of Everything (AIoE) era, it added.
LG’s car component joint venture with Magna International is expected to inaugurate in July. The Korean firm acquired headlamp firm ZKW back in 2018.