LG Electronics said on Monday it might close its loss-making smartphone business.
In January, the South Korean electronics giant said it was looking at all options for the division after almost six years of losses totaling around $4.5bn (£3.3bn).
LG had made many innovations including ultra-wide-angle cameras, rising to the third-largest smartphone maker in 2013.
But bosses said the mobile market had become “incredibly competitive”.
While Samsung and Apple are the 2 biggest players within the smartphone market, LG has suffered from its hardware and software issues.
As LG struggled with losses it had held talks to sell a part of the business but these fell through.
It still ranks because the third hottest brand in North America but has slipped in other markets. LG phones are still fairly common in its domestic South Korean market.
“LG’s strategic decision to exit the incredibly competitive mobile sector will enable the corporate to focus resources in growth areas like electric vehicle components, connected devices, smart homes, robotics, and AI,” it said during a statement.
Last year it shipped 28 million phones, which compares with 256 million for Samsung, according to research firm Counterpoint.
The smartphone business is that the smallest of LG’s five divisions, accounting for just 7.4% of revenue. Currently, its global mobile market share is about 2%.
It has been innovating its phones to compete with its bigger rivals, with last year’s launch of the T-shaped Wing, a smartphone with a bigger screen that swivels bent to reveal a second, smaller one underneath.
Electric cars and TVs
LG still features a strong consumer electronics business, particularly with home appliances and televisions. LG is that the world’s second best-selling TV brand after Samsung.
In December it launched a venture with automotive supplier Magna International which will make key components for electric cars.
LG’s phone inventory will still be available purchasable, and it’ll still provide service support and software updates for existing customers. The division is predicted to be wound down by the top of July.
“Moving forward, LG will still leverage its mobile expertise and develop mobility-related technologies like 6G to assist further strengthen competitiveness in other business areas,” a spokesman added.
Analysts said South Korean rival Samsung and Chinese companies like Oppo, Vivo, and Xiaomi are likely to profit the foremost from LG’s exit.
Smartphone makers struggled during the pandemic with sales down about 10% in 2020 mainly due to lockdowns limiting store openings.

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