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Published photo, Getty Images
LG Electronics announced today, Monday, the closure of its loss-making smartphone manufacturing and sales operations.
The South Korean electronics giant said in January that it was exploring all options related to this section after suffering losses for nearly six years, totaling around $ 4.5 billion in value. .
“LG” registered many inventions, including ultra-wide angle cameras, making it the world’s third-largest smartphone maker in 2013.
But business leaders 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 issues.
As “LG” suffered losses, the company held talks to sell part of the smartphone division, but those talks failed.
The company is still the third most popular brand in North America, but has fallen behind in other markets. LG phones are still relatively popular in its domestic market in South Korea.
“LG’s strategic decision to pull out of the fiercely competitive mobile phone industry will allow the company to focus its resources on growth areas such as electric vehicle components, connected devices, smart homes, robots and more. artificial intelligence, ”the company said in a statement.
According to the company “Counterpoint” for research and studies, “LG” shipped 28 million phones last year, against 256 million devices for Samsung.
The smartphone business is the smallest of LG’s five divisions, accounting for just 7.4% of the company’s revenue. The current global market share of its mobile phones is around 2%.
The company had been working to introduce new innovations in its phones in order to compete with its main competitors. Last year, it launched the “Wing” mobile phone, which takes the form of the letter “T” in English, which is a smartphone with a larger screen that rotates to reveal a second, smaller screen below.
Electric cars and televisions
LG continues to have a strong business activity in manufacturing consumer electronics devices, 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 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 should be closed by the end of next July.
Published photo, Magna
LG has launched a joint venture with automotive supplier Magna International to manufacture basic components for electric cars.
A company spokesperson added that “LG will continue to move forward, benefit from its experience in the field of mobile phones and work on the development of traffic-related technologies such as the sixth generation network to help improve the competitiveness of the company in other areas of activity. ”
Analysts said South Korean competitor LG, Samsung, and Chinese companies such as Oppo, Vivo and Xiaomi, would likely benefit from LG’s exit from the mobile phone market.
It is worth noting that smartphone makers suffered from harsh conditions during the Corona outbreak, with sales dropping nearly 10% in 2020, mainly due to closures that limited store openings.
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