LG is shutting down its smartphone business worldwide
LG said on Monday it will close its loss-making smartphone business worldwide as the once pioneer brand, which has struggled to compete with Apple, Samsung and Chinese brands. LG now looks to focus its resources in “growth areas” such as electric vehicle components, connected devices, smart homes, robotics, AI and B2B solutions, and platforms and services.
South Korea-based LG Electronics Inc. to cease production of smartphones. The company will close its loss-making smartphone division. A major move for the multinational electronics company to completely remove itself from the smartphone business. The company’s decision to exit itself from the market will leave its 10% share in North America. It is the number 3 brand in smartphones after Apple Inc and Samsung Electronics. The group says the company has been incurring a total loss of $4.5 billion for nearly six years.
The decision to leave the broadly competitive field will allow LG to focus on other growth areas such as electric vehicle components, connected devices, and smart homes. By the way, it is not that the company never made a profit, in better times, LG was in a hurry to come to the market with many cell phone innovations including ultra-wide-angle cameras.
In addition, the South Korean company was once the third-largest smartphone manufacturer in the world after Samsung and Apple in the year 2013. Analysts criticized the company for its lack of expertise in marketing compared to its Chinese rivals. Park Sung-soon, an analyst at Cape Investment and Securities, said- “In South America, Samsung and Chinese companies such as Oppo, Vivo, and Xiaomi expect lower profits in the mid-end segment.”
While there are other well-known mobile brands in the smartphone business such as Nokia, HTC, and Blackberry, which have also fallen from heights but have not yet completely disappeared. In South Korea, division employees will be taken to other LG Electronics businesses and affiliates, while elsewhere employment decisions will be made locally. However, LG will provide service support and software updates for some time to customers of existing mobile products, which may vary by region.
As per LG announcement “LG has recently made the difficult decision to close its mobile business to focus on other businesses that will provide new experiences and value for the consumers.
Our mobile products will continue to be available while supplies last, which will vary from country to country.
We will fully honor our product limited warranties, and will also continue to provide software and security updates as well as replacement parts in accordance with applicable regulations and contractual obligations.
We want to THANK YOU for your loyalty and support of LG Mobile. We hope that you will embrace our other smart technologies, as LG continues to deliver a wide range of innovative products and services that make life better.
Please refer to the information below for further details.”