LG Electronics Announces Their Exit from the Smartphone Market

No LG Smart phones hence forth! Learn more…

Monday, 5th April 2021

LG Electronics Inc., the South Korean company has announced on Monday that they will end the production and sales of its smartphone division- a segment that was incurring losses for the tech titan.  After considering their current flow of business the company was compelled to take this decision.

Earlier this year, LG had announced that it was looking into the different options for the segment that was sustaining losses for almost six years now. The losses amounted to nearly $4.5 billion.

This decision by the company has made it the first among major smartphone makers to completely pull out from the game of manufacturing, circulating, and selling smartphones. It will also create a big void in the North American market where it dominated almost 10 percent of the market share and was the third most popular brand. Companies that are likely to take over the slot now are smartphone giants Apple Inc. and Samsung Electronics.

As per a statement by the company, pulling out from the smartphone division, a highly competitive zone, will give LG the much-needed room to shift focus on other more potentially productive and growth areas like electric vehicle components, connected devices, and smart homes.

LG was one of the first companies to enter the smartphone market with innovative technologies like cell phones that had ultra-wide-angle cameras. Moreover, in 2013, it was the third-largest manufacturer of smartphones in the world after Samsung and Apple.

However, the good days did not last long as there were rising complaints about the model’s software and hardware. This, along with slack in software updates, steadily caused the brand to lose favour with its client base. According to market analysts, the company has also not been able to live up to the marketing standards as has been seen in the case of its more competition-driven Chinese counterparts.

As per research provider Counterpoint, LG managed to ship only 23 million smartphones in the year 2020 as compared to the brand Samsung that shipped 256 million pieces. At present, LG’s global share is only 2 percent. It has a sizeable share in Latin America where it holds the fifth position, in addition to its position of popularity in North America.

As per Park Sung-soon, an analyst at Cape Investment & Securities “In South America, Samsung and Chinese companies such as Oppo, Vivo, and Xiaomi are expected to benefit in the low to mid-end segment.”

The News Talkie Bureau

Source:

Indianexpress