LG Electronics will shut down its loss-making mobile phone business to focus on other business lines, the South Korean company said on Monday.
Moving away from phone manufacturing will allow the firm concentrate on other business areas including electric vehicles, connected and smart home devices, robotics, artificial intelligence and business-to-business equipment, it added.
"LG's strategic decision to exit the incredibly competitive mobile phone sector will enable the company to focus resources in growth areas," the company said on Monday.
Its mobile business has been lossmaking since the second quarter of 2015 and the division recorded operating losses of almost $4.5 billion during that time.
LG, which announced its first phone in 2006, will continue selling its current inventory of phones. It will provide support service and software updates for customers of existing mobile products for a “period of time, which will vary by region”, the company said.
“LG will work collaboratively with suppliers and business partners throughout the closure of the mobile phone business. Core technologies developed during the two decades of LG’s mobile business operations will also be retained and applied to existing and future products,” the company said.
“Moving forward, LG will leverage its mobile expertise and develop mobility-related technologies such as 6G to help further strengthen competitiveness in other business areas,” it added.
Despite the company's efforts to attract new customers, LG’s mobile communications arm saw its sales decline 12 per cent last year to 5.2 trillion won ($4.62bn), leading to an operating loss of 841 billion won. It had a 2 per cent share of the global smartphone market, according to Hong Kong-based Counterpoint Research.
Last year, LG launched the Explorer Project to boost its smartphone sales. The division's models included the Wing, a dual-screen smartphone with a rotating feature.
In January, it unveiled a teaser video of a new rollable smartphone with a resizeable screen at the Consumer Electronics Show. The rollable phone was billed as an "exploratory" look at what the future of smartphones could be, with the ability to transform its size from a 17-centimetre phone to a 19.8cm tablet.
Global smartphone sales fell in the first half of last year due to coronavirus-related lockdowns, but recovered in the fourth quarter as a number of new models were released. Smartphone sales in the last quarter of the year jumped 8 per cent to 395.9 million units, according to Counterpoint.