SEOUL (Reuters)-South Korea’s LG Electronics said on Monday that it will end its loss-making mobile phone division. This move will make it the first major smartphone brand to completely withdraw from the market.
Its decision to withdraw will leave its 1
The department said in a statement that the department has suffered losses for nearly six years, with a total loss of approximately US$4.5 billion, and that its exit from highly competitive industries will allow LG to focus on growth areas such as electric vehicle parts and connected devices. And smart home.
In a better situation, LG has already launched many innovative mobile phone products including ultra-wide-angle cameras in the market, and in 2013 it became the world’s third largest smartphone manufacturer after Samsung and Apple.
But later, its flagship model suffered software and hardware disasters, coupled with the slower software update speed, so the brand gradually became favored. Analysts also criticized the company’s lack of marketing expertise compared with its Chinese competitors.
Currently, its global share is only 2%. According to research provider Counterpoint, Samsung’s mobile phone shipments were 23 million units last year, compared with 256 million Samsung’s mobile phones.
Except for North America, it does have a considerable share in Latin America, ranking fifth in Latin America.
Cape Investment & Securities analyst Park Sung-soon said: “In South America, Chinese companies such as Samsung and Oppo, Vivo and Xiaomi are expected to benefit from the low-end market.”
Although other well-known mobile brands such as Nokia, HTC and BlackBerry have also fallen from the heights, they have not completely disappeared.
LG’s smartphone division is the smallest of its five divisions, accounting for approximately 7% of revenue, and is expected to end on July 31.
In South Korea, employees of this department will be transferred to other businesses and branches of LG Electronics, while employment decisions in other places will be made locally.
LG added that LG will provide service support and software updates to customers of existing mobile products for a period of time, depending on the region.
People familiar with the matter said that due to differences in terms, negotiations with Vietnam Vingroup to sell part of the business could not be reached.
Edited by Joyce Lee and Heekyong Yang Edwina Gibbs