Calling it a "strategic decision to exit the incredibly competitive mobile phone sector", the closure is expected to be completed by the end of July. It means LG will now comprise four companies: Home Appliance and Air Solution, Home Entertainment, Vehicle component Solutions and Business Solutions.
The phone business was the smallest of the divisions, accounting for around 7% of total revenue, however as a global handset brand its market share fell to 2% in 2020. LG said it will retain its 4G and 5G core technology patents and will continue to develop communication technologies for 6G.
In a statement, it said it would now also focus on IoT and enterprise connectivity, alongside electric vehicle components, robotics, AI and B2B solutions.
The company said: "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. Core technologies developed during the two decades of LG’s mobile business operations will also be retained and applied to existing and future products."
Across its five companies, LG employs 75,000 people and said job losses from the mobile unit would be "determined at the local level". LG didn't specify if employees would be redeployed to work in other divisions or on future projects but did say it would retain "core R&D personnel".
The South Korean company was looking for a buyer, with Germany’s Volkswagen AG and Vietnam’s Vingroup JSC both interested, according to reports. Incidentally, Vingroup's VinCommerce has sold a 16.3% stake in its business to SK Group, the parent company of South Korea's SK Telecom, in a deal confirmed earlier today.
Talks with potential buyers for LG fell through last month, meaning the company has become the first major global smartphone developer to bow out of the market, despite the innovations it brought in terms of price point and tech. In 2013, the firm was the third largest phone manufacturer behind Apple and Samsung, maintaining its popularity through such developments as the ultra wide-angle camera and screen gimmicks. It developed the curved phone screen, folding screen and most recently the expanding, or "rolling" screen; that was due for release this year, however other smartphone manufacturers are reportedly also working on this technology.
