LG Electronics Inc. (LG) announced on Monday that it is closing its cash-guzzling mobile business worldwide. The South Korean firm said the decision to exit the mobile phone sector will enable it to focus resources in growth areas such as electric vehicle components, connected devices, smart homes, robotics, artificial intelligence, platforms and services.
LG said in a statement the decision was approved by its board of directors earlier today.
“The wind down of the mobile phone business is expected to be completed by July 31 although inventory of some existing models may still be available after that,” the company said.
Current LG phone inventory will continue to be available for sale.
LG said it will provide service support and software updates for customers of existing mobile products for a period of time which will vary by region.
It added that it will work collaboratively with suppliers and business partners throughout the closure of the mobile phone business.
Details related to employment will be determined at the local level, said LG.
“Moving forward, 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,” the company said.
“Core technologies developed during the two decades of LG’s mobile business operations will also be retained and applied to existing and future products.”
LG Mobile Business in South Africa
Two weeks ago, Ventures Africa reported that Mara Phones, the African smartphone manufacturer, has put in a bid to buy the mobile business of LG Electronics, according to a reliable source at the Korean manufacturer who requested anonymity.
LG Electronics put its mobile business up for sale last year and almost sold to Vingroup, a Vietnamese conglomerate owned by billionaire Pham Nhat Vuong. The deal wasn’t successfully completed after Vingroup’s offer failed to meet LG’s expectations.
If the deal goes through, it could fast track Mara Phone’s emergence as one of the leading smartphone manufacturers on the globe. The African company opened two high tech manufacturing facilities in Durban, South Africa and Kigali, Rwanda in 2019. Since then, it has exported devices to more than 70 countries and is concluding plans to open yet another high tech facility in Nigeria.