[Asia Economy Reporter Eunmo Koo] LG Electronics, which is set to withdraw from the mobile business by the end of July, will end smartphone production as of today.
According to LG Electronics on the 31st, the company will conclude phone production today without any separate event. Last month, LG Electronics officially announced the closure of the MC (Mobile Communications) Business Division responsible for the smartphone business and decided to produce phones until the end of May to supply products promised to carriers and other partners. An LG Electronics official explained, "Before ending the mobile business, the expected deadline to complete deliveries of contracted quantities with carriers was the end of May, and production is ending as scheduled."
LG Electronics will continue to support smartphone operating system (OS) upgrades for up to three years after the business closure. The company extended the OS upgrade support period by one year each, from the previous two years for premium models and one year for some entry-level models, to three years for premium models and two years for some entry-level models. After-sales service (AS) will also be supported for four years from the product manufacturing date. Consumers using LG phones can continue to use over 120 service centers nationwide as before.
The personnel responsible for AS and OS upgrade support are expected to be managed under the organization led by Park Il-pyung, LG Electronics’ Chief Technology Officer (CTO). An LG Electronics official stated, "We expect these operations to be managed under the CTO, which is related to research and development (R&D), but considering the reassignment of over 3,500 MC Business Division employees to other departments or affiliates, the scale and timing have not yet been decided." The company plans to complete personnel reassignment before the business closure in July, taking into account employees’ job experience.
The Vietnam factory, which played a central role in smartphone production, will be converted into a home appliance production line. Previously, LG Electronics expanded the home appliance production line at its largest smartphone production base in Vietnam and guaranteed employment succession for local smartphone factory workers. LG Electronics established the ‘LG Haiphong Campus’ in Haiphong, Vietnam, in 2015, which houses production lines for representative products such as TVs, home appliances, and smartphones.
Earlier, LG Electronics held a board meeting in April and announced that it would end the mobile business as of July 31. LG Electronics cited the solidification of the premium smartphone market into a duopoly of Samsung Electronics and Apple, as well as its inability to effectively respond while major competitors such as Chinese manufacturers focused on the entry-level market, as reasons for withdrawing from the business.
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