LG Electronics has announced that it would end the production and sales of its smartphone division which has run into losses over the last few years.
The South Korean company had earlier claimed that the company was open to all options after recording six years of losses in its smartphone business. The current loss is estimated at $4.5 billion.
Earlier, the company was expected to sell a portion of its smartphone business to Vingroup, a Vietnamese company but talks stalled due to differences in terms.
In the first half of 2013, LG was the world’s third-largest smartphone manufacturer – just behind Samsung Electronics and Apple Inc, after becoming known for its ultra-wide angle cameras.
But owing to software and hardware issues – combined with slower rollout of software updates, the company began losing its hold on the market.
LG’s global share is currently only 2 percent. While Samsung shipped over 256 million phones last year, LG shipped only 23 million.
Now, the company will employ its mobile technology for use in home appliance business and vehicle components business. In 2020, the company had launched a joint venture with Magna International Inc to make key components for electric cars.
In South Korea, the division’s employees will be moved to other LG Electronics businesses and affiliates while elsewhere decisions on employment will be made at the local level. LG will provide service support and software updates for customers of existing mobile products for a period of time which will vary by region, it added.