South Korea’s tech giant LG Electronics said on Monday that it will withdraw from the mobile phone business later this year, following years of loss-making performance.
The company said in a statement that the decision to close its mobile business unit was approved by the board of directors earlier in the day amid the continued underperformance, caused by the lack of proper response to a stiffer competition with major rivals.
The wind-down of the mobile phone division was forecast to be completed by the end of July, while the production of mobile devices would last by the end of May to supply the contracted products for business partners.
LG said it will provide service support and software updates for customers of existing mobile products for a period of time which will vary by region.
The South Korean company, once the world’s third-largest mobile phone manufacturer, has been in red ink for the mobile business since the second quarter of 2015.
LG said its exit from the incredibly competitive mobile phone sector will enable it 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.
It noted that the company will continue to leverage its mobile expertise and develop mobility-related technologies, including 6G, to help further strengthen competitiveness in other business areas.