LG on Sunday grew to become the newest legacy phone-maker to exit “the extremely aggressive cell phone sector” because it struggles in a market dominated by Apple, Samsung and rising Chinese language producers.
The South Korean firm said it will close its mobile business unit by the end of July. As an alternative of smartphones, it is going to concentrate on good dwelling merchandise — an space the place it is one of many greatest suppliers — in addition to electrical automobile elements, robotics, synthetic intelligence, business-to-business merchandise and different related units.
LG’s choice to wind down its cellphone enterprise displays the struggles confronted by many firms available in the market. Apple and Samsung have lengthy been the one firms that make vital quantities of cash from smartphones, and even they’ve struggled at occasions. Shoppers are holding onto their telephones longer than earlier than, they usually’re more and more in search of out inexpensive fashions, likeas a substitute of its .
Different legacy cellphone manufacturers resembling BlackBerry and Nokia have confronted their very own struggles, and neither firm now exists in its authentic kind. HMD sells telephones underneath Nokia branding, whereas TCL offered BlackBerry-branded telephones earlier than ending that partnership final yr. Nokia and BlackBerry, the leaders within the QWERTY cellphone world, didn’t transition rapidly to touchscreen smartphones, which doomed their probabilities within the cellular market. LG, too, struggled within the transfer to smartphones. Whereas customers and reviewers have usually favored its units, LG did not have close to the advertising and marketing may of Samsung or the cult following of Apple.
In 2007, the yr the primary iPhone went on sale, LG was the fifth greatest cellphone vendor after Nokia, Motorola, Samsung and Sony Ericsson — all firms, besides Samsung, which might be minor gamers in as we speak’s smartphone market. Within the fourth quarter of 2020, LG did not rank within the high 5 when it got here to the world’s greatest smartphone distributors. Even Huawei, which is going through, managed fifth place. Apple, Samsung and China’s Xiaomi and Oppo stuffed the highest 4 spots.
Over the previous decade, it is turn into more durable to get shopper consideration in cellular. LG has experimented with revolutionary designs over the previous couple of years in an effort to draw patrons., certainly one of which swivels on high of the opposite. And in January at CES, it teased what it hoped can be the world’s first rollable cellphone. The machine has a show that extends upward to create a bigger, extra tablet-like display screen. As CNET’s Roger Cheng famous, “presumably, the underside of the cellphone, when it is in panorama mode, has a mechanism that furls and unfurls the show, just like how its rollable OLED televisions work — however on a smaller scale.”
However with the dying of LG’s cellular enterprise comes the top of the would-be rollable cellphone.
“LG Rollable is not part of our product technique going ahead,” LG spokesman Ken Hong informed CNET.
LG mentioned it is going to proceed to promote present cellphone stock, and it’ll present service, assist and software program updates for purchasers of present cellular units for “a time period, which is able to fluctuate by area.” The corporate’s US enterprise mentioned “extra particulars on software program updates might be offered within the close to future.”
In the meantime, the massive US carriers mentioned they will proceed to assist LG cellphone customers.
A spokesman for AT&T mentioned in a press release that the wi-fi supplier is “conscious of LG’s choice to exit the cellular enterprise,” including that “as a dedication to our prospects, we’ll proceed to assist these utilizing LG units on our community as LG makes this transition.”
The third-largest US provider says that it plans to proceed promoting by means of its present machine stock and “will work intently with LG to find out subsequent steps.”
LG doubtless will lay off some staff, although many in all probability will transfer to different components of LG’s enterprise. It has staff throughout the globe and manufactures its telephones in China, Brazil and Vietnam. The corporate is repurpose its amenities to construct different merchandise like TVs, Hong mentioned, however closure can also be a chance.
“Transferring ahead, LG will proceed to leverage its cellular experience and develop mobility-related applied sciences resembling 6G to assist additional strengthen competitiveness in different enterprise areas,” the corporate mentioned in a press release. “Core applied sciences developed throughout the 20 years of LG’s cellular enterprise operations may also be retained and utilized to present and future merchandise.”
CNET’s Eli Blumenthal contributed to this report.