LG Electronics Set To Shut Down Its Mobile Division
LG Electronics Set To Shut Down Its Mobile Division. South Korea’s LG Electronics Inc will wind down its loss-making mobile division after failing to find a buyer, a move that is set to make it the first major smart phone brand to completely withdraw from the market. “In the United States, LG has targeted mid-priced – if not ultra-low – models and that means Samsung, which has more mid-priced product lines than Apple, will be better able to attract LG users,” said Ko Eui-young, an analyst at Hi Investment & Securities.
LG’s smart phone division has logged nearly six years of losses totalling some $4.5 billion. Dropping out of the fiercely competitive sector would allow LG to focus on growth areas such as electric vehicle components, connected devices and smart homes, it said in a statement. LG’s current global share is only about 2%. It shipped 23 million phones last year which compares with 256 million for Samsung, according to research provider Counterpoint.
Its flagship models suffered from both software and hardware mishaps which combined with slower software updates saw the brand steadily slip in favour. Analysts have also criticised the company for lack of expertise in marketing compared to Chinese rivals. While other well-known mobile brands such as Nokia, HTC and Blackberry have also fallen from lofty heights, they have yet to disappear completely.
Analysts said they were told in a conference call that LG plans to retain its 4G and 5G core technology patents as well as core R&D personnel, and will continue to develop communication technologies for 6G. It has yet to decide whether to license out such intellectual property in the future, they added.
LG Electronics Inc. is a South Korean multinational electronics company headquartered in Yeouido-dong, Seoul, South Korea. LG Electronics is part of the fourth-largest chaebol in South Korea (LG Corporation) and its global sales reached US$55.91 billion (₩ 59.04 trillion) in 2014.
After several rumours and speculation of possible closure of the smart phone division due to poor sales and stiff competition from both flagship and budget brands, LG confirmed that the smart phone division will be officially shut down in April 2021, hence exiting the smart phone market.
