South Korea’s tech company, LG Electronics, has announced it will be shutting down its mobile phone production part of the company, after losing billions of dollars in over six years.
The company announced Monday, April 5 that the phone production unit has recorded losses for 23 consecutive quarters since 2015, with the cumulative debt attaining about 5 trillion won [$4.4 billion] by the end of last year.
The second-largest appliance firm in South Korea was once a pioneer of the Android operating system [Android Froyo 2.2], collaborating with Google in the early 2010s.
The division has failed to produce results amid intensifying price competition among major competitors in the entry-level mobile phone market.
The decision will enable the firm to focus resources in growth areas such as electric vehicle components, robotics and smart homes.
The decision arrives three months after CEO of LG Electronics, Brian Kwon said that the company was open to all options for the mobile communications division in an internal memo sent to employees, hinting that it would withdraw from smartphones manufacturing.
LG Electronics was the world’s third-largest phone maker in the early and mid-2000s, behind Nokia and Samsung.
Regardless, as of the third quarter of 2020, LG Electronics’ global market share for smartphones was only 10% in North America and 4% in Latin America, according to Counterpoint Research.
LG electronics also stated that it’ll provide service support and software updates for customers of existing mobile products for a period that will vary by region.