South Korea’s LG Electronics announced Monday that it will be ending its mobile phone production due to financial losses, making it the first phone brand to completely withdraw from the market.
In a statement delivered earlier this morning, LG said that it would be leaving the highly competitive mobile phone market and instead shifting focus to electric vehicle components, smart home tech, robotics, AI and business-to-business IT solutions.
LG has decided to end the program after 6 consecutive years of losses, which have cost the company upwards of $4.5 billion.
The wind down in LG’s mobile division will leave a sizeable 10% market share available in North America, where Apple and Samsung will likely add to their customer base. LG’s global share of the mobile phone market is currently about 2% and it shipped about 23 million phones last year. For comparison, Samsung shipped approximately 62 million phones in the fourth quarter alone.
The statement issued by LG lays out a timeline for the wind down, with an expected completion date of July 31, 2021.
Employees in LG’s mobile production centers will be relocated to other facilities, though some decision on employment will be made on a local level. LG’s statement does not discuss any potential layoffs as a result of the news.
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