It's now official: LG Electronics is bowing out from the highly competitive smartphone market.
In a statement released on Monday, LG said that its "strategic decision" to leave the smartphone industry "will enable the company to focus resources in growth areas such as electric vehicle components, connected devices, smart homes, robotics, artificial intelligence and business-to-business solutions, as well as platforms and services."
Despite the closure, the electronics giant said that its current smartphone inventory will remain on sale and that those who have existing mobile devices will receive support and software updates "for a period of time which will vary by region."
The announcement was made three months after LG CEO Kwon Bong-seok sent out a memo to his staff hinting that "there would be a major change in the operation of the smartphone segment."
Although the company is tapping out from the “incredibly competitive mobile phone sector,” LG said that it will still leverage its “mobile expertise and develop mobility-related technologies such as 6G to help further strengthen competitiveness in other business areas.”
“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 added.
Meanwhile, the company said that the closure of its mobile phone business is expected to be completed by July 31 while “details related to employment will be determined at the local level.”
Prior to the confirmation, The Korea Herald reported that the company was considering leaving the smartphone market after losing around $4.5 billion over the last five years.
Last year, the company launched two flagship devices—the LG Velvet and LG Wing—in a bid to compete with smartphone powerhouses like Samsung, Apple and other Chinese smartphone manufacturers such as Xiaomi, Huawei and Vivo.
During CES 2021, LG briefly demonstrated the “unique resizable screen” of its LG Rollable smartphone. The company’s rollable device is said to be an exploratory look at what the future of smartphones may bring.