LG Electronics has announced it will exit the mobile phone space this summer.  LG’s decision to exit the mobile phone business was driven by its inability to break a years-long cycle of faltering market share and lack of profitability. lg robotics

Despite being a wildly prolificate innovator when it came to phone design, its best selling devices were typically low-cost, low-margin products.  By exiting the mobile phone market it can focus on other product areas where it has more opportunity to take a leading position, including in robotics.

Yet much of the Intellectual Property (IP) and lessons it has learned in the smartphone space will propel it to a leadership position in the fast-growing service robotics space.

Service robots are a category of robots that typically perform tasks alongside or near humans and often have a degree of mobility.  The category does not include industrial robots such as those found on assembly lines and manufacturing.  They include robots used for personal use or for commercial purposes, with examples including the Roomba household vacuum cleaners, the humanoid Pepper from Softbank and the Kiva robot used in Amazon’s warehouses.

LG’s share of the overall service robot market is small, though it’s business is more concentrated in the higher revenue and more profitable professional service robot space.  It is estimate to hold roughly 10% share of the global professional cleaning robot market and a 2% share in the consumer vacuum robot space.

LG Electronics makes a number of different robots for both consumers and enterprises.  These include robot vacuum cleaners for homes and apartments, disinfecting robots for hotels, schools, offices and restaurants, and its line of CLOi Bots, such as its CLOi PorterBot that checks in guests to hotels, takes their luggage for them and show them to their rooms, as well as a number of other robots for different tasks.

LG has been promoting its CLOi robot product line as well as its open-source Robot Operating System 2.  Much of LG’s mobile phone workforce will transfer to other divisions, including its robotics development.  Robots are the next area of innovation that is benefiting from advances in Artificial Intelligence (AI) and data in the cloud.  LG is expected to increase spending along with adding resources to both its robotics and AI research and development efforts.

With LG’s exit from robotics, it will focus on establishing a larger presence as an AI-based solutions provider.  Robots will be a key portion of that focus.

Strategy Analytics forecasts that global revenues from service robot sales will grow at a CAGR of 36% through 2026 and that the global total value of the service robot space will increase by more than 500% from 2000 to 2026.