HomeBusinessLG Electronics set to shut down its phone production unit

LG Electronics set to shut down its phone production unit

LG Electronics, has announced it will be closing down its mobile phone production unit, after losing billions of dollars in recent years.

This announcement was made on Monday, April 5, following the huge losses the phone production company has recorded for 23 consecutive quarters.

LG Electronics, which is South Korea’s second largest appliance firm, collaborated with Google in early 2010 and the firm was once considered a pioneer of the Android operating system.

The firm has recorded losses with the cumulative deficit reaching about 5 trillion won ($4.4 billion) by the end of last year. It has also struggled to increase sales, while facing tough competition from cheaper Chinese rivals such as Huawei.

The division has “failed to produce results” amid “intensifying price competition among major competitors in the entry-level mobile phone market”, the company said in a statement.

The decision will enable the firm to “focus resources in growth areas such as electric vehicle components”, robotics and smart homes, it added.

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