LG to quit global smartphone market
April 7, 2021 - South Korea’s LG Electronics is to close its loss-making smartphone division after losses of nearly $4.5 billion over the past five years. LG’s smartphone business, the smallest of its five divisions, is expected to be wound down by the end of July.
“We will end production and sales of the mobile phone business due to its continued slump amid stiffer competition,” the company said in a regulatory filing. “We will improve our business portfolio by efficiently focusing our resources on core areas.”
In 2009, just before the smartphone market took off, LG was the third-largest handset manufacturer globally, selling nearly 120 million feature phones. In 2010, LG entered the smartphone market in earnest, adopting Microsoft Windows instead of Android from its “rival” Google. The Microsoft OS made many existing users turn away from LG.
LG sought a turn around by launching the G series in 2013 to take on the Samsung Galaxy S. The G3 and G4 models were well received, and market share began to grow again. But the 2016 launch of its G5 modular smartphone failed to excite users. Market share fell from 4.6 per cent to 3.2 per cent, marking the start of LG’s decline.
LG has dropped to ninth place by market share as successive failures of its flagship smartphones, the V50 ThinQ in May 2019 and the dual-screen LG Wing in October 2020, cost it ground against Chinese vendors Huawei, Xiaomi and Oppo.
LG’s fortunes in the smartphone market stand in sharp contrast to its South Korean competitor Samsung, which has surged into pole position globally. LG shipped 24.7 million phones last year compared with 255.7 million for Samsung, according to research provider Counterpoint.
The company plans to shift more of its resources towards the fast-growing electric vehicle components business. LG is to launch a joint venture with Canadian automotive supplier Magna International in July to make EVs components.