LG Electronics officially announced on April 5th its exit from the smartphone business after years of drastic losses in the ferocious smartphone market.

In a particular statement, LG stated that it will continue selling its existing inventory, and the current equipment will receive constant after-sales support and software updates. LG expects to terminate its smartphone business prior to the end of July, though the company will continue on the R&D of relevant communication technology such as 6G so as to further enhance its competitiveness in other fields.

As pointed out by the coverage, the mobile business of LG has been in a slump since the second quarter of 2015, and the accumulated loss had arrived at nearly KRW 5 trillion (US$4.4 billion) last year. Data shows that the smartphone department is the smallest department of LG, which occupied merely 7.4% of revenue during the fourth quarter.

Photo source: LG official website

LG’s smartphone business is ranked 3rd and 5th in the North American and Latin American markets, yet merely accounts for about 2% of the global market.

Insiders had previously commented that LG Electronics had negotiated with Volkswagen and Vingroup, the largest private enterprise group in Vietnam, regarding the sales of its smartphone businesses, though nothing came of it at the end. With no buyers in sight, LG may be prompted to shut down the related production lines, and exit from the particular business.

Coverage has pointed out that LG’s inability in elevating its capability of smartphone business was partially imputable to the global shortages of semiconductor, and the company does not manufacture its own smartphone chips like its competitor Samsung.

Previously, LG had signed a partnership agreement with US electronics test and measure equipment supplier Keysight Technologies and the Korea Advanced Institute of Science and Technology (KAIST). Based on the agreement, the participants will co-develop the relevant technology on terahertz, which is a critical frequency band for 6G communication. The project aims to complete all R&D of 6G by 2024, and LG anticipates to achieve commercialization in 6G by 2029.

Source: Anue