LG Electronics to Shut Down Mobile Phone Business
The South Korean electronics manufacturer, LG is closing its loss-making mobile phone business, the company said in a statement, notifying stakeholders about the development.
The board of directors approved the move on Monday, LG Electronics said in a statement released in Seoul, its headquarter amidst margin pressure.
It however noted that the shutdown of LG’s mobile phone sector is expected to be completed by the end of July. The company had delve into mobile phone as demand for smartphones skyrocketed.
“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 will also focus on business-to-business solutions as well as platforms and services,’’ the statement highlighted.
LG wants to “continue to leverage its mobile expertise and develop mobility-related technologies such as 6G to help further strengthen competitiveness in other business areas’’.
However, core technologies developed during the two decades of LG’s mobile business operations are to be retained and applied to existing and future products, the company said.
LG’s withdrawal from the smartphone business had been on the horizon for some time. The division has shown an operating loss for years.
It appears decline margin, competition and need for diversification to ensure focusing on areas where margin are strong informed the company’s decision, some analysts explained.
LG Electronics Inc. is a South Korean multinational electronics company headquartered in Yeouido-dong, Seoul, South Korea. LG Electronics is part of the fourth-largest chaebol in South Korea.
It comprises four business units: Home Entertainment, Mobile Communications, Home Appliances & Air Solutions and Vehicle Components, with Starion India as its main production vendor for refrigeration and washing machines in the Indian sub-continent.
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LG Electronics to Shut Down Mobile Phone Business