LG scraps its smartphone business as losses mount

LG Electronics said on Monday it would close down its loss-making smartphone business.

In January, the South Korean electronics giant said it was looking at all options for the division after almost six years of losses totalling around $4.5bn (£3.3bn).

LG had made many innovations including ultra-wide angle cameras, rising to third largest smartphone maker in 2013.

But bosses said the mobile phone market had become “incredibly competitive”.

While Samsung and Apple are the two biggest players in the smartphone market, LG has suffered from its own hardware and software issues.

As LG struggled with losses it had held talks to sell part of the business but these fell through.

It still ranks as the third most popular brand in North America but has slipped in other markets. LG phones are still fairly common in its domestic South Korean market.

“LG’s strategic decision to exit the incredibly competitive mobile phone sector will enable the company to focus resources in growth areas such as electric vehicle components, connected devices, smart homes, robotics, artificial intelligence and business-to-business solutions, as well as platforms and services,” it said in a statement. 

Last year it shipped 23 million phones, which compares with 256 million for Samsung, according to research firm Counterpoint.

The smartphone business is the smallest of LG’s five divisions, accounting for just 7.4% of revenue. Currently its global mobile phone market share is about 2%.

It has been innovating its phones to compete with its bigger rivals, with last year’s launch of the T-shaped Wing, a smartphone with a larger screen which swivels out to reveal a second, smaller one underneath.

Electric cars and TVs

LG still has a strong consumer electronics business, particularly with home appliances and televisions. LG is the world’s second best-selling TV brand after Samsung.

And last year it launched a joint venture with automotive supplier Magna International that will make key components for electric cars.

LG’s phone inventory will continue to be available for sale, and it will still provide service support and software updates for existing customers. The divisions is expected to be wound down by the end of July.

“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,” a spokesman added.

Analysts said South Korean rival Samsung and Chinese companies such as Oppo, Vivo and Xiaomi are likely to benefit the most from LG’s exit.

Other well-known mobile brands such as Nokia, HTC and Blackberry have also struggled with sales but have yet to disappear completely.

Source: BBC

LG Energy Solution to invest $4.5 billion in U.S. battery production through 2025

(Reuters) – LG Energy Solution said on Thursday it plans to invest more than $4.5 billion in its U.S. battery production business through 2025 and add 4,000 jobs as it considers building at least two new U.S. plants, a company executive told reporters.

The South Korean supplier, a unit of LG Chem, said the investment will result in an additional 70GWh of U.S. battery production capacity. The company declined to say where in the United States it is considering a new battery manufacturing plant.

Denise Gray, president of LG Energy Solution’s Michigan unit, said the investment, which would indirectly create another 6,000 jobs during construction, was being made to respond to the growing electric vehicle market.

“We are eager to expand our production capacity so that it can meet the needs of the numerous global automakers across the U.S. and Europe,” Gray said.

LG is also in advanced talks with General Motorsto build a more than $2 billion second joint venture cell manufacturing plant in Tennessee that could be announced later this month. The first LG-GM JV plant is nearing completion in Lordstown, Ohio. Both companies have confirmed they are in discussions for a new plant.

LG Chem has been in a battle with cross-town rival SK Innovation after it alleged that SK stole trade secrets. The U.S. International Trade Commission (ITC) sided with LG Chem in February, but SK Innovation has lobbied the White House to overturn the decision, warning it would force it to halt production on a new factory in Georgia.

Company executives said Thursday’s announcement had nothing to do with the ITC review.

“This is more about (having a) very proactive and preemptive investment plan prior to confirmation of demand from our customers,” LG Energy Solution Senior Vice President Chang Seung-se said.

“By adding this capacity earlier… we can quickly respond to market demand and customers’ orders,” he told reporters.