JavaScript is off. Please enable to view full site.

LG becomes first major smartphone brand to withdraw from market

LG becomes first major smartphone brand to withdraw from market

Monday, April 05, 2021, 10:40 GMT+7
LG becomes first major smartphone brand to withdraw from market
A man talking on his phone walks past the logo of LG Electronics during Korea Electronics Show 2016 in Seoul, South Korea, October 27, 2016. Photo: Reuters

SEOUL -- South Korea’s LG Electronics Inc said on Monday it will wind down its loss-making mobile division - a move that is set to make it the first major smartphone brand to completely withdraw from the market.

Its decision to pull out will leave its 10% share in North America, where it is the No. 3 brand, to be gobbled up by smartphone titans Apple Inc and Samsung Electronics.

The division has logged nearly six years of losses totalling some $4.5 billion, and dropping out of the fiercely competitive sector would allow LG to focus on growth areas such as electric vehicle components, connected devices and smart homes, it said in a statement.

In better times, LG was early to market with a number of cell phone innovations including ultra-wide angle cameras and was once in 2013 the world’s third-largest smartphone manufacturer behind Samsung and Apple.

But later, its flagship models suffered from both software and hardware mishaps which combined with slower software updates saw the brand steadily slip in favour. Analysts have also criticised the company for lack of expertise in marketing compared to Chinese rivals.

Currently its global share is only about 2%. It shipped 23 million phones last year which compares with 256 million for Samsung, according to research provider Counterpoint.

In addition to North America, it does have a sizeable presence in Latin America, where it ranks as the No. 5 brand.

“In South America, Samsung and Chinese companies such as Oppo, Vivo and Xiaomi are expected to benefit in the low to mid-end segment,” said Park Sung-soon, an analyst at Cape Investment & Securities.

While other well-known mobile brands such as Nokia, HTC and Blackberry have also fallen from lofty heights, they have yet to disappear completely.

LG’s smartphone division - the smallest of its five divisions, accounting for about 7% of revenue - is expected to be wound down by July 31.

In South Korea, the division’s employees will be moved to other LG Electronics businesses and affiliates while elsewhere decisions on employment will be made at the local level.

LG will provide service support and software updates for customers of existing mobile products for a period of time which will vary by region, it added.

Talks to sell part of the business to Vietnam’s Vingroup fell through due to differences about terms, sources with knowledge of the matter have said.

Reuters

More

Read more

;

Photos

VIDEOS

Vietnam’s Mekong Delta celebrates spring with ‘hat boi’ performances

The art form is so popular that it attracts people from all ages in the Mekong Delta

Vietnamese youngster travels back in time with clay miniatures

Each work is a scene caught by Dung and kept in his memories through his journeys across Vietnam

Experience summer sand-boarding in Mui Ne

Sand-boarding, a popular activity amongst local children in the coastal tourism town of Mui Ne in south-central Vietnam, is attracting hundreds of tourists to the Red Sand Dunes

Latest news