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LG Wing, T-shaped device launched in 2020. Credit: LG
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After many rumors in recent months, LG has confirmed the end of its smartphone division. The business had been suffering from losses for 23 consecutive quarters. The loss was $ 4.1 billion over the past six years.
In a note sent to the press on the night of this Sunday (4), LG Electronics do Brasil says:
After evaluating all the possibilities for the future of our cell phone business, Headquarter Global decided to close this division in order to strengthen its future competitiveness through selection and strategic focus.
According to information from the newspaper Nikkei Asia, the seven-member board of directors approved the company’s suggestion to close the mobile communications unit. The company is now expected to turn to more profitable sectors, such as home appliances and TVs.
As the publication recalls, the decision to close the sector was, in a way, expected, since attempts to sell the division failed – among potential buyers, were Vietnam’s Vingroup and Russia’s sovereign wealth fund.
In addition to the long-standing losses, another factor mentioned by the newspaper is the chip competition – while Samsung produces this and other components, LG depends on external suppliers and needed to face competition from Chinese manufacturers to obtain these resources. The newspaper also recalls that LG has failed to keep up with changes in the industry in recent decades. From the third largest cellphone maker in the early 2000s, it dropped to less than 2% of the global market share in 2020.
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In the past few months, LG has started to talk openly about the fate of its cell division. In December, news broke that the company’s entry and intermediary devices would be outsourced to a Chinese MDG, responsible for developing the products that would carry the Korean brand. In February, she set up her Brazilian factory, in Taubaté (SP), for sale. So far, the future of the installation is uncertain.
LG came from some rather bold moves in recent years to try to get the attention of the premium smartphone market. Among them, there were models of two screens and even in “T” format. In the last edition of CES, the company showed a smartphone concept retractable, with a screen that could be rolled up. Apparently, we will not see this device on the market.
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