A nostalgic era is coming to an end: LG Electronics has announced it will cease production of its smartphones, following what have been years of significant financial losses in a very competitive market.
Although the move has been rumoured over the past several weeks, the electronics giant confirmed that its board of directors approved the “strategic” move on Monday. LG, which was once the world’s third-biggest cellphone maker, anticipates to completely wind down the unit’s production by the end of July; however, some of its smartphones may still be available for sale until inventories run out. LG did promise that it will continue supporting existing models for some time, depending on the region.
By ceasing smartphone production, LG instead plans to focus on expanding its other areas, such as “electric vehicle components, connected devices, smart homes, robotics, artificial intelligence and business-to-business solutions, as well as platforms and services,” the company revealed in a statement. However, the South Korean tech powerhouse did note that it will continue developing certain mobility-related technologies, such as 6G.
LG’s mobile division has been the subject of significant mounting financial losses over the past several years, which have reportedly totalled $4.5 billion. According to data compiled by Counterpoint, the company’s share of the global smartphone market currently amounts to approximately 2%. In 2020, LG only shipped 24 million smartphones, while major market rivals including Apple and Samsung shipped more than 201 million and 256 million units, respectively.
Information for this briefing was found via LG Electronics. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.