South Korean LG Electronics has officially announced the end of the production of mobile phones.
Why the decision was made?
According to The Korea Times over the past four years, the company in the mobile market has suffered losses of 4.5 billion dollars.
LG's management has been thinking about closing the unprofitable sector for a long time. In particular, in 2020, LG CEO Kwon Bong Sok addressed employees with a written statement. In it, he spoke about the fierce competition in the smartphone market and the difficult choices that management needs to make. He reassured employees that if a decision is made to sell or reduce the business, no one will lose their jobs.
LG Mobile Communications, which develops and manufactures mobile phones, is expected to leave the global smartphone market by August this year. However, users who already have the company's smartphones have nothing to worry about — service support will be available for some time. Its duration will depend on the country of the phone owner.
What will the company do?
The management of LG Electronics is confident that all the experience and knowledge accumulated during the development and release of smartphones will not be lost. It is successfully used in other areas of the business to increase competitiveness.
The main activity of the Korean brand was and remains the production of household appliances and electronics for the home.
The company is also successfully developing new business areas. At the end of last year, LG Electronics and Magna International announced a mutual project to develop equipment for electric vehicles. In early 2020, a joint company with Luxoft was established to develop and develop the webOS Auto platform, which is used in various automotive devices.
The division History
Until 2009, LG was one of the leaders in the push-button phone market. The bet on the release of smartphones was made on Android.
Every year, the company releases a new phone model. Each of them focuses on different aspects: the buttons on the back of the LG G2, the large screen of the LG G3, the design in the form of a back cover made of genuine leather — LG G4.
Unfortunately, LG's smartphone business is not a success. Even during the growth period, their models never became the sales leaders.
The company has taken various measures to restore its position in the mobile phone market, including radical management changes. But in the end, nothing helped to get out of the crisis. Since 2015, the LG Mobile Communications division has been suffering losses.
The era of LG smartphones is over.