One-time pioneer LG Electronics to close smartphone business
The company will end production and sales of mobile phone products on July 31 due to intensified competition and continued losses, it said in a statement.
LG Electronics Inc. is shutting down its loss-making mobile communications unit in a move to streamline operations and focus on future projects such as electric vehicle components.
The company will end production and sales of mobile phone products on July 31 due to intensified competition and continued losses, it said in a statement.
LG was one of the pioneers of the Android operating system, collaborating with Alphabet Inc.’s Google on the Nexus smartphone line and producing some of the best camera and display technology in the category’s early days. In the U.S., the company was third behind Apple Inc.’s iPhone and fellow South Korean giant Samsung Electronics Co., but it hasn’t been competitive for years and Chinese upstart OnePlus has since replaced it amid a global loss of market share to overseas rivals.
The company said in January that it would review the direction of its smartphone business, having earlier that month promised it would sell a rollable phone this year. The firm held talks over a potential sale but negotiations failed due to big differences in valuing technology patents, according to local media reports.
LG has been expanding its vehicle components business and partnered with Magna International Inc. for a joint venture to make key parts for EVs. Shares in the Seoul-based electronics maker soared more than 30% since the announcement, fueled by hopes that the collaboration may contribute to Apple’s EV project. LG’s expertise from developing mobile tech may help its offerings in the auto space, such as with detecting user intent, drowsiness or gesture interactions.
LG Electronics may position itself as an electric-vehicle component solutions provider, boosting its appeal to tech giants such as Apple, and also to traditional automakers aspiring to make ‘smart’ EVs. Narrowing losses at its vehicle-components unit, to 2 billion won in the latest quarter, is a sign that it’s on track to a turnaround.
