LG Electronics has left the mobile market after a battle with Apple and Samsung.
It dismissed speculation as baseless a few months ago. However, the electronics giant has announced that it is exiting the mobile market.
LG Electronics expects to discontinue smartphone production after years of failing to compete in a market where it was once a market leader.
The South Korean conglomerate announced Monday that it would shut down its cell phone company and exit the "highly competitive" industry by July 31.
Rumours of the change began to circulate at the start of the year, when LG's mobile division ran up massive losses of approximately $5.8 billion over nearly six years and fell behind larger rivals Apple and Samsung.
LG claims the move would free up money to invest in other "ovation" businesses such as smart homes, robotics, artificial intelligence, and electric vehicle components.
Despite its business challenges, LG continued to roll out high-tech phones, such as the swiveling two-screen Wing it released last year and a rumored “rollable” smartphone with an expanding screen that it expected to release this year.
The latter device now appears unlikely to ever hit shops, but LG stated that some existing versions could remain available following the shutdown of its smartphone unit. According to a news release, the company will also offer software upgrades and service support for existing products for a period of time that will differ by country.
“Core innovations built over the course of LG's two decades in the mobile market will also be maintained and extended to current and future products,” the company said.
LG was once a dominant force in the mobile industry – it pioneered early display and camera technology and was a pioneer of the now-ubiquitous Android operating system.
At its peak in 2013, the company was the world's third largest smartphone maker, behind Samsung and Apple. However, the flagship models have struggled with hardware and software issues in recent years.
According to industry research firm Counterpoint, LG shipped 23 million phones last year, compared to Samsung's 256 million.