South Korean electronics giant LG has announced its exit from the smartphone business after making losses for years and will instead focus on its other growing businesses.
LG made the announcement Monday leaving millions of its smartphone users confused on what will happen to their mobile devices in various markets in which it spreads its brands.
In a press statement, the electronics firm indicated that the decision was approved by its board and it expected to completely shut down the mobile phone business by end of July.
LG said the smartphone business exit will allow the company to pay more attention to growing areas including electric car components, smart homes, connected devices and artificial intelligence (AI).
As soon as the announcement was made LG shares plummeted 2.52 per cent on Monday.
LG Wing 5G. PHOTO/LG
The move comes after LG’s smartphone division reported huge annual losses for close to 6 consecutive years to the tune of $4.5 billion, according to reports by Reuters.
During their prime, LG smartphones challenged Samsung’s Galaxy line of devices as the two top brands which run on Google’s Android operating system.
But hardware and software glitches and failure to innovate rang the death knell for LG amid competition from cheaper smartphones from Chinese brands like Oppo, Xiaomi and Huawei.
The company has promised to provide service and software support for existing LG smartphone users for an unspecified period amid concerns over how long this will hold.