In an announcement that was expected a few months ago, LG yesterday issued a statement in which it states that it is leaving the smartphone market. “After evaluating all the possibilities for the future of our cell phone business, Headquarter Global decided to close this division in order to strengthen its future competitiveness through selection and strategic focus ”, says the text. The company will end cell phone production in July.
LG’s smartphone division worked at a loss for about five years, having “burned” about US $ 4.1 billion in this period. Although it has a relevant position in Brazil and even in the USA, the company is currently practically irrelevant in global terms, with about 2% of the market. For years, the company had difficulty competing with its rival Samsung, and was even more hampered by rise of Chinese such as Huawei (currently down due to the US government blockade, but still a relevant player), Xiaomi, Oppo and Vivo. In addition to being strong in their homeland, the largest market in the world, these companies have been increasing their operations in other markets in recent years.
A few months ago, LG was looking for a solution for its cell phone division. The company studied outsourcing production together with other companies and even sell the division, but there was no agreement with potential investors. Thus, LG decided to leave the market.
In Brazil, the company has a factory in Taubaté (SP) that produces smartphones, in addition to monitors. The closure of the smartphone division will possibly result in the shutdown of at least part of the 400 employees working in this area. Monitor manufacturing should not be affected.
Below the statement from LG.
Since the second half of 2015, our global mobile phone business has suffered an operating loss for 23 consecutive quarters, resulting in a cumulative accumulation of approximately $ 4.1 billion (US) by the end of 2020.
After evaluating all the possibilities for the future of our cell phone business, Headquarter Global decided to close this division in order to strengthen its future competitiveness through selection and strategic focus.
As a company that deeply values the contribution of every LG employee, customer and partner, we will communicate openly and transparently during this process, seeking a fair and pragmatic approach, while meeting legal obligations.
It is with sadness that we share this news with our customers and partners who throughout all these years have shown us confidence and supported us.
LG Electronics do Brasil thanks you and will focus heavily on your business in order to continue to provide innovative products and services that will make life better.
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