LG announces shutdown of global smartphone business
What's the story
LG has officially announced that it will shut down its mobile phone business after failing to find a buyer for its faltering consumer technology arm.
The loss-making smartphone arm will wind down operations on a global scale, with the company restructuring resources and employees into "growth areas" such as electric vehicle components, robotics, smart homes, AI, and other B2B and services solutions.
No takers
Decision approved by directors after failure to sell business unit
The development was relayed through the company's official press channel. The decision was unanimously approved by the board of directors.
This doesn't come as a surprise since LG CEO Kwon Bong-seok had sent an internal memo to LG employees in January after initial reports emerged.
The beleaguered mobile maker had racked up losses totaling to $4.5 billion over the last five years.
Until stocks last
LG will provide software and service support per local laws
The winding down of the global business will go on until July 31. The company, however, will continue to sell its existing inventory of mobile phones.
LG has promised to provide Android software updates and service support for its products, but the exact scope will vary region-wise, presumably to meet local minimum standards.
The inventory will quite likely be moved with discounts.
Fate unknown
Statement doesn't acknowledge CEO's claim to retain 60 percent employees
Meanwhile, the LG press release also noted that the fate of the remaining LG Mobile employees will be determined at the local level.
Back in January, Kwon had assured that around 60 percent of the employees would be assimilated into other LG businesses.
The company statement, however, makes no specific claims to this effect or confirm the CEO's employment assurance.
Quote
LG will continue to develop 6G tech, leverage mobile expertise
"LG will continue to 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," the company stated.
Leveraging tech
LG's statement indicates it will continue R&D in the segment
LG's exit doesn't affect its progress on the upcoming 6G telecom infrastructure, and it seems like the company will continue its work in the field.
The official statement indicates that the company will continue mobile-related research and development for the purpose of integration in the wide swathe of products the conglomerate boasts of in its repertoire.