LG to permanently close its smartphone division

LG to permanently close its smartphone division

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It will focus its efforts on other areas such as IoT devices and smart homes

The company confirmed the decision in a statement TECHBIT. 

LG is one of the best-known electronics brands in the world. It has a wide variety of products in industries such as robotics and smart home devices. However, not in all areas, it has achieved the expected results. It has announced that it has made the decision to permanently close its smartphone division.

Exit from the smartphone sector

The company confirmed that the steering committee has approved the decision.  Its exit from the competitive smartphone sector is part of its strategy.   So, it allocates more resources in other important growth areas such as electric vehicles and  Internet of Things ( IoT ) devices. Moreover, smart homesroboticsartificial intelligence, and B2B solutions. as well as platforms and services.

There had long been rumors that the company would make this decision. Its participation in the global smartphone market was only 1.7%, according to figures from Counterpoint Research.  Furthermore, its smartphone division had been registering negative results for at least five years.  In the opinion of specialists, its high-end models’ range has not been able to compete with South Korean rival Samsung; while the latest more affordable models have faced stiff competition from Chinese brands. Added to all this was the global shortage of semiconductors

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The smartphone will close its door

This same year the smartphone division will close its doors, despite the fact that, just a few months ago, during CES 2021, the company had unveiled its prototype of a roll-up screen phone that, it was said, would be launched at the end of 2021, it had been speculated that the company was trying to find a buyer for its smartphone business but, apparently, the talks stalled which led it to stop developing its next phones planned for the first half of this year.

In a statement sent to Engadget, LG’s head of global corporate communications, Ken Hong, said: “The departure of the LG brand from the mobile space may be disappointing for some, but we are in an industry where we pivot and do what is Better for employees and shareholders is also vitally important. As other beloved phone brands have shown before us, it is a numbers game, not a popularity contest.

What will happen to the models already sold?

LG explained that the current inventory of its smartphones will continue to be available for sale, the offer will depend on each country. It also stated that it will continue to offer service support and software updates for its existing cell phone customers for a period of time that will vary by region.

On the other hand, the company said that it will work in collaboration with suppliers and business partners during the closing of the smartphone business.

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Finally, he pointed out that, looking to the future, it will continue to take advantage of its experience in smartphones and develop technologies related to mobility, such as 6G. It will boost up the other business. “The key technologies developed during the two decades of LG’s smartphone operations will also be preserved and applied to existing and future products,” the company explained.

LG’s exit from the smartphone industry will complete on July 31. Although inventory for some existing models may still be available after that.

 


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