LG Electronics announced today, Monday, that it will close its business of manufacturing and selling smart phone devices that is suffering losses.
The South Korean giant in the field of electronic devices said last January that it is studying all options related to this section after incurring losses for nearly six years, with a total value of about $ 4.5 billion.
And “LG” has registered many inventions, including cameras with a very wide shooting angle, which qualified it to rise to the rank of the third largest manufacturer of smart phones in the world in 2013.
But company managers say the mobile phone market has become “very competitive”.
While Samsung and Apple are the biggest players in the smartphone market, LG has suffered from its own hardware and software problems.
With “LG” suffering from losses, the company held talks to sell part of the smartphone division, but these talks were not successful.
The company is still the third most popular brand in North America, but has fallen behind in other markets. And LG phones are still relatively popular in its domestic market in South Korea.
“LG’s strategic decision to exit from the incredibly competitive mobile phone sector will enable the company to focus its resources on areas of growth such as electric vehicle components, connected devices, smart homes, robots and artificial intelligence,” the company said in a statement.
According to the company “Counterpoint” for research and studies, “LG” shipped 28 million phones last year, compared to 256 million devices for Samsung.
The smart phone business is the smallest of the five divisions in LG, accounting for only 7.4 percent of the company’s revenue. The current global market share of its mobile phones is around 2%.
The company had worked to introduce new innovations to its phones in order to compete with its major competitors. Last year, it launched the “Wing” mobile phone, which takes the shape of the letter “T” in English, which is a smartphone with a larger screen that rotates to reveal a second, smaller screen underneath.
Electric cars and televisions
LG continues to have a strong business activity in the manufacturing of consumer electronics, especially home appliances and televisions. LG is the second best-selling TV brand in the world after Samsung.
Last December, the company launched a joint venture with the vehicle supplier, “Magna International”, to undertake the task of manufacturing basic components for electric cars.
LG will continue to sell its stock of phones, and will continue to provide maintenance services and software upgrades to existing customers. This section is expected to be closed by the end of next July.
A company spokesperson added that “LG will continue to advance forward and benefit from its experience in the field of mobile phones and work on developing traffic-related technologies such as the sixth generation network to help enhance the company’s competitiveness in other business areas.
Analysts said LG’s South Korean competitor, Samsung, and Chinese companies such as Oppo, Vivo and Xiaomi, will likely benefit from LG’s exit from the mobile phone market.
It is noteworthy that the smart phone manufacturers suffered from difficult conditions during the Corona epidemic, with sales declining by nearly 10 percent in 2020, mainly due to the closures that limited the opening of shops.