South Korea’s second-largest appliance firm after Samsung, LG Electronics, has announced its intention to close down its loss-making mobile phone business.
This follows the failure of the company to record a profit for 23 consecutive quarters – since 2015 – and to also find a buyer for its smart-phone manufacturing division.
LG Electronics was once considered a pioneer of the Android operating system, collaborating with Google on the Nexus series in the early 2010s.
At its peak in 2013, LG was the world’s third-largest smartphone manufacturer behind Samsung and Apple.
But the firm has long struggled to increase sales, entering the market late and facing tough competition from emerging cheaper Chinese rivals such as Huawei.
“The division has failed to produce results amid intensifying price competition among major competitors in the entry-level mobile phone market”, the company said in a statement.
“Dropping out of the fiercely competitive sector would allow LG to focus resources in growth areas such as electric vehicle components, robotics and smart homes,” the statement added.
LG’s smartphone division – the smallest of its five divisions – which accounts for about seven percent of the firm’s total revenue is expected to be wound up by July 31, 2021.
