South Korea’s LG Electronics announced on Monday after a unanimous decision by the board of directors that it will stop production of loss-making smartphones at the end of July.
Since the second quarter of 2015, LG has been making smartphones at a loss. Since then, the industry’s accumulated losses have been close to 4.5 billion U.S. dollars. The company has been looking for buyers for its mobile manufacturing industry recently, but this has failed.
The company currently holds approximately 2% of the global smartphone market.
Last year, it shipped 23 million mobile phones, while market leader Samsung sold 256 million.
LG pointed out that stopping the production of smartphones may reduce revenue in the short term, while improving the company’s financial situation in the long run. Among LG’s five businesses, smartphone manufacturers are the smallest, accounting for 7% of the company’s total revenue.
The company said it will continue to sell its smartphone inventory after July 31 and provide services and software updates for a period of time.
LG is one of the first companies in the world to use the Android operating system in its mobile phones.