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Seoul (AP) - The South Korean electronics manufacturer LG is closing its loss-making smartphone division.
LG Electronics announced that the board of directors approved the move on Monday.
It is a strategic decision to withdraw from the area "with incredibly strong competition".
After years of losses in the division, the withdrawal of what was once the third largest cell phone manufacturer in the world had been on the horizon for some time.
The company now wants to focus its resources on growth areas such as parts for electric vehicles, interconnected devices, robotics, intelligent living, artificial intelligence and business-to-business solutions, it said.
The shutdown of the “mobile phone business” is expected to be completed by the end of July.
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The devices that are still in stock should continue to be offered for sale.
LG also wants to continue to support device service and offer software updates for its customers.
Details of the employment situation would be regulated at local level.
The South Korean electronics company, the second largest behind Samsung Electronics, also announced that it will continue to develop mobile communications technologies such as 6G in order to strengthen its own competitiveness in other business areas.
6G is considered the next level of super-fast cellular standards.
LG's announcement of its withdrawal from the highly competitive smartphone market comes as no surprise.
Most recently, company representatives said that all options, including a sale of the division, were on the table.
However, no details of possible interested parties were given.
The mobile communications division had posted an operating loss in every quarter since the second quarter of 2015.
For 2020 as a whole, the deficit was 841.2 billion won (currently: 634.5 million euros).
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LG's market share for smartphones in South Korea had already fallen due to the rumors of a withdrawal, reported the national news agency Yonhap, citing the market researcher Counterpoint Research.
In the months of January and February, LG's share was only 10 percent.
The share of the market leader Samsung rose in February year-on-year by 4 percentage points to 69 percent.
© dpa-infocom, dpa: 210405-99-89255 / 2
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