[Comprehensive] LG Electronics to Exit Phone Business After 26 Years... Final Withdrawal on July 31

The LG Twin Towers in Yeouido, Seoul, where LG Electronics' headquarters is located, on the 2nd, as LG Electronics' exit from the smartphone business approaches. Photo by Mun Honam munonam@

[Asia Economy reporters Seulgina Jo and Minyoung Cha] LG Electronics is exiting the mobile business after 26 years. Facing a cumulative deficit totaling 5 trillion won and difficulties in overseas sales, the company ultimately chose to 'withdraw.' In particular, the decisive factor marking the end of the long-struggling smartphone business was the 'selection and concentration' strategy of LG Chairman Koo Kwang-mo, who instructed a bold reorganization of unprofitable businesses.

On the morning of the 5th, LG Electronics held a board meeting and resolved to cease production and sales of the MC division, which handles the smartphone business, as of July 31. LG Electronics explained, "The intensifying competition in the mobile phone business and continuous business downturn were the background," adding, "This is to focus capabilities on core businesses and improve business structure." This official decision came 75 days after LG Electronics announced earlier this year that it would consider all possibilities, including the sale of its smartphone business.

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Accordingly, LG phones, which traveled the world from the 1995 'Hwatong' to the early 2000s Chocolate phone and Prada phone, will disappear into the annals of history. LG Electronics plans to continue producing mobile phones until the end of May to fulfill commitments to telecommunications operators and other partners. Additionally, sufficient after-sales service will be maintained to prevent inconvenience to purchasing customers and existing users. The 3,700 employees belonging to the MC division will be reassigned to other divisions or affiliates within the first half of the year. Separate from the smartphone business termination, research and development (R&D) on core mobile technologies such as 6G will continue.

This decision was significantly influenced by Chairman Koo's actions immediately after taking office, adjusting the affiliate portfolio. Along with the withdrawal from the smartphone business, LG Electronics is expected to accelerate the reorganization of its business portfolio. It is widely anticipated that the company will concentrate its capabilities on AI-based home appliances and future automotive electronics while expanding new businesses such as robotics.

Earlier this year, there was speculation within and outside the industry that LG Electronics' smartphone business might be sold to a global company. However, negotiations with leading candidates such as Vietnam's Vingroup and Germany's Volkswagen failed to progress, leading to the final decision to withdraw rather than sell.

This content was produced with the assistance of AI translation services.