LG Shuts Down Phone Business After 30 Years, Pivots to New Ventures

Historic End of Mobile Device Era for Korean Tech Giant

LG Electronics has officially concluded its 30-year smartphone business operations and is now fully committing to new business sectors. The company that once ranked third globally in smartphone market share is now redirecting its focus toward future growth drivers including AI semiconductors and smart home platforms, marking a significant strategic transformation.

This dramatic shift represents more than just discontinuing an underperforming product line – it signals LG's comprehensive business model restructuring from traditional hardware manufacturing toward technology platform services and next-generation computing solutions.

The Rise and Fall of LG Mobile

LG Electronics began its mobile phone business in the 1990s and achieved remarkable success, reaching third place globally in smartphone manufacturing at its peak. Throughout the 2000s, LG competed fiercely with Samsung Electronics for dominance in the domestic mobile market, demonstrating strong technological capabilities and market presence.

However, following the smartphone revolution, LG struggled to compete effectively against Apple and Samsung's ecosystem advantages. Despite innovative attempts including dual-screen devices and modular design concepts, LG failed to capture significant market share in the premium smartphone segment dominated by these industry leaders.

Beyond Mobile Strategy Implementation

Following its smartphone withdrawal, LG Electronics launched its "Beyond Mobile" strategy to secure new growth engines. This initiative extends far beyond simply discontinuing one business division – it represents comprehensive corporate restructuring aimed at positioning LG as a technology platform company rather than a traditional manufacturer.

The company is concentrating investments in future technology sectors including artificial intelligence, robotics, autonomous driving, and smart home ecosystems. Particularly noteworthy is LG's emphasis on expanding B2B business operations to establish more stable revenue structures.

AI Semiconductor Investment Expansion

Among LG's new strategic directions, AI semiconductor investments have attracted the most attention. The company has invested in Canadian AI chip startup Tenstorrent, aiming to secure next-generation computing technologies that could differentiate its future product offerings.

Tenstorrent specializes in developing processors optimized for AI computations, offering more efficient AI processing capabilities compared to traditional GPU architectures. Through this investment, LG seeks to acquire core technologies that can be integrated into its AI-powered home appliances and services.

Smart Home Platform AtHome Acquisition

LG Electronics has actively pursued smart home ecosystem development through its acquisition of the AtHome platform. AtHome provides integrated management capabilities for various smart devices, enabling seamless connectivity with LG's appliance portfolio to deliver enhanced smart home experiences.

This acquisition represents part of LG's broader strategy to transition from individual appliance sales toward comprehensive solution provision. Rather than simply selling products, the company aims to offer complete lifestyle solutions that integrate multiple devices and services.

B2B Business Expansion

LG Electronics is aggressively expanding from its traditional B2C focus into B2B markets. The company is strengthening various B2B product categories including commercial displays, automotive components, and industrial solutions to diversify revenue streams.

The electric vehicle components business has emerged as a particularly promising growth driver for LG. The company is developing competitive advantages in automotive infotainment systems, battery management systems, and other EV-related technologies while expanding partnerships with global automotive manufacturers.

Differentiation Strategy from Global Tech Giants

Unlike Samsung Electronics and other global IT companies that focus heavily on AI and semiconductors, LG is concentrating on practical industry sectors including carbon neutrality, energy efficiency, and infrastructure optimization. This approach represents part of the broader LG Group's risk-diversified business restructuring strategy.

LG Electronics emphasizes building competitive advantages in differentiated market segments rather than engaging in direct competition with established industry leaders. The company states its intention to build competitiveness in our own differentiated areas, focusing on creating independent technology ecosystems.

Future Challenges and Market Outlook

For LG's post-mobile strategy to succeed, the company must demonstrate rapid performance improvements in new business areas. Particularly crucial is creating substantial synergies between AI semiconductor investments and smart home platform developments to justify the strategic transition.

Additionally, strengthening connectivity between existing home appliance operations and new technology ventures will be essential for establishing competitive advantages as an integrated solution provider. The company must prove that its diversified approach can generate superior returns compared to focused strategies.

The success of LG's transformation will likely influence strategic decisions at other traditional electronics manufacturers facing similar competitive pressures from technology platform companies. As the electronics industry continues evolving toward software and services, LG's pivot strategy may provide valuable lessons for corporate transformation.

Original: https://trendy.storydot.kr/technology/lg-phone-business-shutdown