LG Leaves Smartphones Alone
South Korea’s LG Electronics said it would withdraw from the smartphone market. The company’s decision to exit the market will allow smartphone behemoths like Apple and Samsung Electronics to devour its 10% market share in North America, where it is the third-largest smartphone brand.
The mobile division has lost $4.5 billion in nearly six years, and LG said in a statement that leaving the highly competitive sector would allow it to concentrate on growth areas such as electric car parts, connected devices, and smart homes.
LG was once in the forefront with a range of mobile phone innovations, including ultra-wide-angle cameras. However, the company’s flagship models later suffered from software and hardware flaws, which, coupled with delayed software updates, made the brand gradually lose popularity. The company has also been criticized by analysts for lacking marketing experience in comparison to Chinese competitors.
Other smartphone makers have also fallen in popularity, like Nokia, Blackberry and HTC, but the companies haven’t exited the market.
LG’s smartphone division, which accounts for around 7% of the company’s revenue, is set to be shut down by July 31. Employees from the smartphone division in South Korea will be transferred to other LG Electronics companies and branches. Additionally, the company said customers with current mobile devices would receive service support and updates for a period that varies by region.
Were you a fan of LG’s smartphones? What rival competitors do you think will grab up LG’s market share?
I am not a financial advisor and my comments should never be taken as financial advice. Investments come with risk, so always do your research and analysis beforehand.