LG Electronics says it will close its mobile unit this year, in a move to refocus its efforts on higher-growth businesses.
The South Korean company on Sunday said it will close down its mobile business by July 31.
However, it will continue to provide service support and software updates for its existing mobile phones for an undetermined period.
“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,” the company said.
LG’s smartphone division accounts for about 7% of revenue.
The unit according to financial reports has posted more than$4.4 billion of operating losses over the last six years.
“With the termination of the mobile communications business, our sales could decline in the short term, but we expect it will improve our business portfolio and financial structure in the mid-and long-term,” LG said in a regulatory filing announcing the move.”