South Korea’s LG Electronics Inc. will end its loss-making mobile phone segment after failing to find a buyer, making it the first major smartphone brand to fully withdraw from the market.
The company will end production and sales of mobile phone products on July 31, focusing on growth in areas including growth in electronic vehicles (EVs), smart homes, robotics and artificial intelligence, a statement said.
The phones accounted for 8.2 percent of LG sales last year and would be a short-term revenue loss, but the company expects the shutdown to be financially favorable in the long run. It will strengthen its automotive parts business and continue to develop mobile technologies such as sixth-generation networking and cameras, he said.
The country’s rival country will leave ten percent of it in North America, where it is the third largest brand Samsung, as the country’s rival is likely to come to the doorstep of this country’s rival.
“In the United States, LG is targeting mid-priced – if ultra-low-no models and that means Samsung has a mid-priced product line compared to Apple, Samsung will be better able to attract LG users,” says Ko Yu – young, high investment and Securities Analyst.
The LG smartphone division has logged in for nearly six years with a loss of about 4. 4.5 billion.
At a better time, LG marketed several cell phone innovations, including ultra-wide angle cameras, and at the top of it in 2013, it was the third largest smartphone maker in the world behind Samsung and Apple.
LG partnered with alphabet company Google on the Nexus smartphone line, one of the pioneers of the Android operating system.
Later, however, its flagship models, both software and hardware, crashed, gradually merging with software updates, gradually favoring the brand. Analysts have also criticized the company for its lack of marketing skills compared to its Chinese rivals.
Other well-known mobile brands like Nokia, HTC and Blackberry have also come down from the heights, they have not yet completely disappeared.
Chinese rivals will benefit
LG’s current global share is about 2 percent. It shipped 23 million phones last year, compared to Samsung’s 256 million, according to research provider Counterpoint.
In addition to North America, it has a huge presence in Latin America, where it ranks as the fifth largest brand.
Due to the final bilateral relationship, rival Chinese brands such as Oppo, Vivo and Xiaomi do not have much presence in the United States, and LG’s absence in Latin America will benefit them and Samson’s low- to mid-range product offers, analysts say.
LG’s smartphone segment is the smallest of its five segments and accounts for about 7 percent of revenue
In South Korea, department employees will be transferred to other LG electronics businesses and affiliates, while decisions on employment elsewhere will be made at the local level.
Analysts said they were told at a conference that LG plans to retain its 4G and 5G core technology patents as well as core R&D staff and will continue to develop communication technology for 6G. No decision has been made on licensing such intellectual property in the future, they added.
LG will provide periodic service support and software updates for customers of existing mobile products that will vary by region,
The company said in January that it would review the direction of its smartphone business, promising earlier this month that it would sell a rollback phone this year.
Due to the difference in terms, there was talk of selling some part of the business to Vietnam’s VineGroup, sources said.
LG has expanded its automotive component business and partnered with Movina International Inc. to build the core of the EV.
Shares of the Seoul-based electronics maker have risen more than 30 percent since the announcement, hoping the partnership could contribute to Apple’s EV project. Including interaction detection.