LG is quitting the smartphone business, focusing instead on connected devices, electric vehicle parts, robotics and its smart-home offerings, the company said Monday.
LG’s exit punctuates a drawn-out decline that took it from being one of the world’s top smartphone makers to an also-ran with less than a 2 percent share. Like other legacy players, such as Nokia and BlackBerry, it lost its footing as competition intensified.
Because users tend to stick with iOS or Android operating systems, manufacturers whose devices run on Android, such as Samsung and Xiaomi, probably will stand to gain from LG’s departure.
Apple commands about 19 percent of the global market, followed by Samsung’s 15 percent share.
The “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, artificial intelligence and business-to-business solutions,” the company said in a statement.
LG had already warned about the fate of its phone business in January, saying that it was looking at all options, including a potential sale of the unit.
As the company winds down its smartphone business, LG said it will continue to provide service support and software updates for customers who already own handsets for a period of time, but did not specify exact dates. The company also did not elaborate on potential layoffs as a result of the shutdown, stating only that “Details related to employment will be determined at the local level.”
LG said it expects to exit the mobile phone business by the end of July, but customers may be able to find existing models for sale after that.
LG was known for pushing the envelope with its smartphones. In 2013, it came out with a curved smartphone screen, making it one of the first electronics makers at the time to debut the technology for the mass market. Two years later, the company wowed users with the high-end photo-taking capabilities of its LG G4.
And only last year, LG unveiled the WING 5G, a 5G-enabled smartphone that came with two screens. One of the screens could rotate up to 90 degrees, with the aim of letting users toggle different apps at the same time and multitask more easily.
LG has dropped out of the global top seven players by market share as successive failures of its flagship smartphones have cost it ground against fast-rising Chinese groups such as Huawei, Xiaomi and Oppo. But it had remained the third-largest smartphone maker in North America and the fifth-largest player in Latin America by market share.
LG had planned to pull its smartphone business into profitability this year. In January at CES, the company showed off the concept for a new model with a rollable screen, in which the display expands into a small tablet. LG said at the time that the device would launch sometime this year, though the company confirmed on Monday that it won’t now be released.
But the firm won’t crash out of the industry entirely.
“Moving forward, LG will continue to leverage its mobile expertise and develop mobility-related technologies such as 6G,” it said in the statement.
“Core technologies developed during the two decades of LG’s mobile business operations will also be retained and applied to existing and future products.”
In recent years, smartphone manufacturers have confronted shifting habits of their customers, as people hold onto their devices for longer rather than indulge in the latest upgrade. That has hurt smartphone markers, which have responded in part by raising prices.
Investors had called for the company to wind down the smartphone business, arguing that it represented a misallocation of resources that weighed on LG’s stock market valuation, despite robust sales of premium home appliances and televisions.
