LG Elec will make phones until May and pull the plug on mobile biz in July

LG Electronics Inc. will stop rolling out smartphones from June as it is pulling the plug on its 26-year mobile business that at its heyday used to rank No. 3 in the world but lost more than $4 billion over the last five years.

The Korean electronics company disclosed Monday that its board approved of the decision to stop production and sales of mobile business officially on July 31, citing “protracted business slump from heated competition.”

It will keep up research and development in mobile technology as it is core to next-generation TV, home appliances, automotive electronics and robotics and double down on its efforts to make headway in 6G wireless technology.

The mobile communication staff will be relocated mostly to the new joint venture devoted to EV powertrain launching in July with its Canadian partner Magna International.

Much-hyped rollable handset teased in September last year would never see the daylight after the company chose to completely exit from phone business instead of keeping the premium brand while selling off the mass-market phones due to lack of buyers.

The company promised to provide full after-sale services to existing phone users after decommissioning by the end of May.

“Sales will inevitably fall due to the cease in smartphone business in the short term, but we expect structural business and financial improvement in the longer term,” it said.

[Photo by Park Hyung-ki]

Shares closed 2.52 percent down at 154,500 won ($136.91) even after the upside from the withdrawal of the biggest damper on the company’s bottom line has already been factored since the company alerted of a reorganization decision in January.

LG phones once ranked No. 3 since they first joined the market in 1995. Losses from 2015 have reached 5 trillion won.

[ⓒ Maeil Business Newspaper & mk.co.kr, All rights reserved]