Tech

LG to Announce the Scrapping of Its Smartphone Division in Three Days

By Bill Toulas / April 2, 2021

LG Electronics is to announce the end of its smartphone business on April 5, 2021, according to the Korea Times. The reason for pulling the plug is simply because the firm hasn’t found a way to turn things around and make a profit from the particular segment. The mobile business has been recording losses steadily since 2015, so it’s not that the firm hasn’t tried long enough. In 2018, LG decided to put the Home Entertainment boss in charge of the mobile division, hoping for a change of wind, but it never happened.

Even though LG Mobile has been showcasing especially high levels of experimentation and innovation in the past year, it looks like, behind closed doors, the executives of the Korean tech giant had to make some tough decisions. In January, the rumors about LG seeking a buyer for its mobile business spread rapidly, and a spokesperson of the firm publicly stated that these were fake news. As it was revealed later, the initial reports were fueled by the fact that LG's smartphone production in South Korea had been suspended.

So, the question now is, are the latest reports more credible and more truthful? LG provided a statement to Korea Times, saying the following: “There's nothing to comment on. All we can say is that every possibility is open. Although we cannot confirm that (shut down) right now, we will announce the specific direction of our mobile communications business during the board meeting on April 5.”

LG has historically been an important player in the smartphone market, and the Android ecosystem in particular, but it looks like their lack of differentiation, clear and more focused R&D direction, pricing competitiveness, and inability to find a distinct place in terms of the target audience, have collectively taken their toll.

Also, we shouldn’t rule out that LG was unable to get back on track because of its bad reputation caused by the bootloop issues that multiple of its models had between 2015 and 2018, which destroyed people’s trust. The publicity of the relevant lawsuits revealed unfair trade practices and warranty law violations, so it really went badly.

Add to that the fact that LG is one of the worst OEMs when it comes to delivering major Android updates fast, and you have even fewer people willing to accept all that in return for an admittedly quality device.



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