The South Korean company said it would close its mobile business unit by the end of July. Instead of smartphones, it will focus on smart home products – an area in which it is one of the largest suppliers – as well as components of electric vehicles, robotics, artificial intelligence, business-to-business products and other related devices.
LG’s decision to close its phone business reflects the struggles facing many companies in the market. Apple and Samsung have long been the only companies that earn significant sums from smartphones, and even they sometimes struggle. Consumers are holding on to their phones longer than before and are increasingly looking for cheaper modelsinstead of his .
Other inherited phone brands such as BlackBerry and Nokia have faced their own difficulties and now no company exists in its original form. HMD sells Nokia-branded phones, while TCL sells BlackBerry-branded phones before ending the partnership last year. Nokia and BlackBerry, the world leaders in QWERTY phones, failed to quickly switch to touchscreen smartphones, which doomed their chances in the mobile market. LG also struggled with the move to smartphones. While consumers and reviewers usually like its devices, LG is not close to the marketing power of Samsung or Apple’s cult followers.
In 2007, the year the first iPhone went on sale, LG was the fifth largest phone supplier after Nokia, Motorola, Samsung and Sony Ericsson – all companies except Samsung, which are minor players in today’s market. smartphones. In the fourth quarter of 2020, LG did not rank among the top five when it comes to the largest smartphone manufacturers in the world. Even Huawei, which is upright, managed fifth place. Apple, Samsung and China’s Xiaomi and Oppo filled the top four.
Over the last decade, it has become more difficult to attract the attention of mobile users. Over the past few years, LG has been experimenting with innovative designs in an attempt to attract buyers., one of which rotates on top of the other. And in January at CES, he annoyed what he hoped would be the world’s first cell phone. The device has a display that expands upwards to create a larger, more tablet-like screen. As CNET’s Roger Cheng noted, “probably the bottom of the phone, when in horizontal mode, has a mechanism that wraps and unfolds the display, similar to the way its rotating OLED TVs work, but on a smaller scale.”
But with the death of LG’s mobile business comes the end of the future mobile phone.
“LG Rollable is no longer part of our product strategy going forward,” LG spokesman Ken Hong told CNET.
LG said it will continue to sell current phone stocks and provide services, support and software updates to customers of existing mobile devices for “a period of time that will vary by region.” The company’s US business said that “additional details on software updates will be provided in the near future.”
Meanwhile, major US carriers have said they will continue to support LG phone users.
A spokesman for AT&T said in a statement that the wireless provider was “aware of LG’s decision to leave the mobile business”, adding that “as a commitment to our customers, we will continue to support those who use LG devices in our network such as LG makes this transition. ”
The third-largest US carrier says it plans to continue selling through its existing device list and “will work closely with LG to determine the next steps.”
LG is likely to lay off some employees, although it is very likely to move to other parts of LG’s business. It has employees all over the world and manufactures its phones in China, Brazil and Vietnam. The company is looking to redirect its facilities to build other products such as TVs, Hong said, but closure is also possible.
“Moving forward, LG will continue to leverage its mobile expertise and develop mobility-related technologies such as 6G to help further strengthen competitiveness in other business areas,” the company said in a statement. “The core technologies developed during the two decades of LG’s mobile business operations will also be maintained and applied to existing and future products.”
CNET’s Eli Blumenthal contributed to this report.