It’s Official! LG to shutdown mobile phone business worldwide

After much speculations, South Korean giant Electronics Inc. (LG) announced that it is closing its mobile business unit. The decision was approved by its board of directors earlier today (Monday).

“LG’s strategic decision to exit the incredibly competitive mobile phone sector will enable the company to focus resources in growth 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 said in a statement.

“LG will provide service support and software updates for customers of existing mobile products for a period of time which will vary by region. LG will work collaboratively with suppliers and business partners throughout the closure of the mobile phone business. Details related to employment will be determined at the local level,” it added.

LG’s mobile division has lost $4.5 billion in the last six years and will now focus on electric vehicle devices and smart homes.

In 2013, LG was the third-largest smartphone maker in the world after Samsung and Apple, but later LG's flagship models began to face software and hardware issues. According to analysts, the main reason was the lack of experts.

LG currently has only a 2% share of the global smartphone market, according to Counterpoint. LG sold just 23 million phones last year, compared to its rival Samsung's 256 million.

LG currently has a market share of about 10% in North America, where it is the third largest company after Apple and Samsung. Like North America, LG has a large share in Latin America and is ranked fifth there.

Earlier it was reported that LG was in talks with Vietnam's One Group to sell its smartphone division, but it did not work out.

“The wind down of the mobile phone business is expected to be completed by July 31 although inventory of some existing models may still be available after that,” the company said.