Update date: April 5, 2021 09:14 AM WEST
By Shubham VermaLG announced Monday that it is quitting its smartphone business. In a prepared statement, the South Korean company said the decision to close its loss-making mobile division would enable it to focus “resources on growth areas.” These growth areas for LG include electric vehicle components, connected devices, smart home products, robotics, artificial intelligence, and business-to-business solutions among other products and services. This decision comes days after LG showed off its ambitious foldable phone at CES 2021.
Existing LG phones such as the Wing, Velvet, Q-series, W-series, and K-series will continue to sell out, but that will continue until stock is out. LG said it will provide service support and software updates to its existing mobile phone customers for a period that varies depending on the customer’s location. This means that it is possible that the Velvet in India may not get a software update at the same time as European customers. The company will work “collaboratively” with suppliers and business partners throughout the closure of the mobile division.
LG said it will completely wind down its cellphone business by July 31, but that stock of some of its existing phones may still be available after that. It’s not sure how this will take effect because technically if these phones are for sale, LG will provide support and service for these phones. This will not be called closing. But it is good for people who use LG phones. You don’t have to worry too much now because your phone will be officially supported for quite some time.
There is also no information about any layoffs due to the decision. LG said that “details regarding employment will be determined at the local level.” An earlier report suggested that LG may decide to transfer these employees to other departments in the company.
LG’s decision to stop it in the mobile industry isn’t surprising. There have been multiple rumors about it since January when LG’s CEO confirmed that the company was exploring possibilities for its mobile phone business, which had been constantly racking up losses. This included the company speaking with potential buyers for its phone business. Obviously, LG has been talking to at least two companies, but the discussions never got past a certain point, leaving LG in a crisis.
For about six years now, LG’s smartphone business has been a shambles, although the company has left no stone unturned to fend off rival Samsung and Chinese players with really good phones, like the Velvet. It was only six years later that LG’s mobile phone business turned a profit.
LG even showed off its first foldable phone earlier this year, something it aimed to take on foldable phones from the likes of Samsung and Motorola. It went ahead to confirm that this phone will hit the market later this year. But with this news, it’s highly unlikely that LG’s Rollable Phone will ever arrive.