It has been tough for LG’s mobile division in the past years. Decline in sales and the consequent operating losses had been a thorn in the flesh for the South Korean conglomerate. In a bid to cut losses, it has subcontracted third-party manufacturers to produce its lower cost devices, yet suffered a loss of almost $125 million in the third quarter of 2020. The division has acquired a total loss of about $4.5 billion dollars in six years.
In January, an LG official explained that “since the competition in the global market for mobile devices is getting fiercer, it is about time for LG to make a cold judgment and the best choice. The company is considering all possible measures, including sale, withdrawal and downsizing of the smartphone business.”
It has not been very clear to the general public why LG’s mobile division has not been able to perform well in the market while Samsung has dominated the android market for years. It has been suggested that LG has tried to keep pace with Samsung without having the same level of tech or sales that is required to support high-end phone development. And device support has not been up to par with competitors. Some experts has pointed out that, less than impressive hardware, slow and buggy updates, bootloop issues, bad and faulty mainboards, inefficient marketing strategies, all contributed to the sales decline of LG phones.
So it wasn’t surprising when LG Electronics announced on Monday, the 5th of April 2021,that it will withdraw from the mobile market, leaving its market share to be scrambled over by other mobile device manufacturers.
“LG will continue to manufacture phones through the second quarter to meet contractual obligations to carriers and partners. This means customers can still purchase LG mobile phones currently in inventory and service support and security software updates will continue to be provided for a period of time for certain devices,” it says.
LG originally revealed that while no new phones would be launched, it would continue to sell mobile devices until all inventory is cleared out across the world.
The wind up should be completed by July 31.