LG becomes the first major smartphone brand to withdraw from the market

SEOUL (Reuters) – South Korea’s LG Electronics Inc. said on Monday it would drop its loss-making mobile division – a move that will make it the first major smartphone brand to completely withdraw from the market.

His decision to give up will leave the 10% share in North America, where the mark no. 3, which will be swallowed by the titans of Apple Inc. and Samsung Electronics smartphones.

The division recorded nearly six years of total losses of about $ 4.5 billion, and giving up the highly competitive sector would allow LG to focus on growth areas such as electric vehicle components, connected devices and smart homes. , is shown in a statement.

In better times, LG launched early on the market with a number of innovations in the field of mobile phones, including ultra wide angle cameras and was once in 2013 the third largest smartphone maker in the world behind Samsung and Apple.

But later, its flagship models suffered from both software and hardware inconveniences, which, combined with slower software updates, caused the brand to constantly slip in its favor. Analysts also criticized the company for its lack of marketing expertise compared to Chinese rivals.

Currently, its overall share is only about 2%. Last year, 23 million phones were shipped, compared to 256 million for Samsung, according to research provider Counterpoint.

In addition to North America, it has a considerable presence in Latin America, where it ranks 5th.

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

While other well-known brands of mobile phones, such as Nokia, HTC and Blackberry, have also fallen from a height, they have not yet completely disappeared.

The LG smartphone division – the smallest of the five divisions, which accounts for about 7% of revenue – is expected to be liquidated by July 31.

In South Korea, the division’s employees will be moved to other LG Electronics companies and subsidiaries, while employment decisions will be made elsewhere locally.

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

Discussions to sell part of the business to the Vingroup group in Vietnam have fallen due to differences in terms, said sources with knowledge of the matter.