LG Electronics announced on Monday (Apr 5) that it would stop manufacturing mobile phones, making it the first major smartphone brand to shut down its mobile business.

The decision will allow the South Korean company to focus more of its resources in other growth areas, such as electrical vehicle components, smart homes and artificial intelligence. It also hopes to “leverage its mobile expertise” to develop technologies like 6G, which will strengthen its competitiveness in other areas. 

LG will completely wind down its smartphone business by Jul 31, but inventory of existing models may continue to be available. 

The firm’s smartphone division – which is the smallest of its five divisions – will continue to provide software updates for its current products for a period of time, which will vary by region.

Employment details will be decided on a local level.

The development comes after LG reported multiple financial losses. In 2020, it shipped 23 million phones, a meek fraction compared to the 256 million phones shipped by its local competitor Samsung.

The brand had also accumulated US$4.5 billion (S$6.06 billion) in losses over nearly six years. 

LG was at its peak in 2013, only behind Apple and Samsung as the world’s third-largest smartphone manufacturer. However, multiple factors such as slow updates and software and hardware mishaps led to other companies taking over.