LG has announced it is to close down the smartphone side of its business. The division has been a major loss-maker for several years now, and now LG has decided that enough is enough.
The South-Korean electronics giant has persevered with its smartphones for longer than some analysts forecast, but on Monday the 5th April 2021, the somewhat inevitable decision was announced.
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As recently as January of this year LG announced that it was still considering all options for the division. At the time of the announcement, the division had notched up losses of $4.5 billion over the past six years.
The company has blamed fierce competition in the market, in a statement announcing the decision they said –
“The strategic decision to exit the incredibly competitive mobile phone sector will enable the company to focus resources in growth areas such as electric vehicle components, connected devices, smart homes, robotics, artificial intelligence, and business-to-business solutions.”
Their smartphone operations are expected to be wound down by the end of July. The company also announced that it may continue to sell existing models after this date.
LG dial a wrong number
Not so long ago, LG was in a prime position in the smartphone market. Their products were innovative and popular, and as recently ago 2013 the company was the world’s third-largest smartphone manufacturer, according to the research firm Strategy Analytics.
Now, they barely make the top ten, although they still had a strong foothold in both the USA and its home market. In America, LG was still the third-largest smartphone vendor.
There is no doubt that it is a competitive market, but both Samsung and Apple continue to prosper in the niche, so what went wrong for LG?
Partially this was down to hardware issues. Despite producing innovations like ultra-wide-angle cameras, the company struggled to keep up with innovations of their main competitors. They also didn’t hang onto the loyalty of their customer base, which both Samsung and Apple have done to a greater degree.
Then there was increasing competition from Chinese manufacturers. Companies like Huawei, Xiaomi, and Oppo, all of which have moved into the market with surprising ease and success.
Despite the ongoing losses and shadow hanging over the division, they continued to innovate as they pushed to recover lost market share. Last year they unveiled their WING 5G, this 5G enabled model featured two screens, one of which rotated by up to 90°. Even more recently, they announced a phone that could be rolled up into a tablet. This was due to be released this year, but LG has now confirmed that it won’t be coming to market.
The overall picture for LG is brighter, and most analysts believe that it is the correct decision. LG has a strong presence in several other electronic sectors that it will be able to concentrate on. And the company hasn’t given up the ghost on all mobile technologies, in their statement they said –
“Moving forward, LG will continue to leverage its mobile expertise and develop mobility-related technologies such as 6G. Core technologies developed during the two decades of LG’s mobile business operations will also be retained and applied to existing and future products.”