South Korea’s LG Electronics announced on Monday that it is winding up its smartphone business from the market due to huge losses. It is one of the leading brands of South Korea that declared to withdraw its mobile devices. For six years the brand was suffering huge losses of approximately up to 4.5$ billion (about Rs. 33,010 crores).
It became the first-ever mobile brand to shut down its business from the smartphone sector. It will shut down the business by 31 July 2021, LG stated.
This will give more opportunities to Apple, and Samsung to increase the customer base and market share easily.
The current situation will help the LG to focus on the market share and growth of other electronic devices like electric vehicle devices, smart homes, artificial intelligence, connected devices, robotics.
Currently, LG has only 2% of the global market share that has affected the growth and stability of LG Electronics.
LG was established as GoldStar in Seoul in 1958. In 2013, LG was the leading manufacturer of smartphones in the global market. Internationally, it was the third brand after Samsung and Apple that produces innovative smartphones. Last year the company shipped 23 million smartphones whereas Samsung shipped approximately 270 million phones.
Due to the bad performance of the software and hardware in the devices declined the consumer interest. Even the market analyst criticised for the bad performance of the professionals as compared to the Chinese competitors.
The Chinese mobile devices have zero presence in the market of the United States due to bilateral relations. As per the Counterpoint Research in 2020 the market share of LG in the United States was about 9 %.
Several other renowned brands have also collapsed because of high competition in technology like Nokia, Blackberry, and HTC. LG currently has a presence in Latin America where it holds 5th position. The company said smartphones are the smallest sector of the other five divisions.
LG declared that the employee division of this section will transfer to the other LG Electronics divisions. Even they stated that for the existing users they will provide software updates and service support.
LG Electronics still has a remarkable presence and strong customer attention in the electronic business such as with televisions appliances, monitors, home appliances (refrigerators, washing machine, and health care appliances). Apart from the other services after Samsung Inc., LG is the second-largest producer of television appliances.
When it comes to smartphones its LG V60 ThinQ 5G was the best series in LG. It has also produced LG Wing 5G, LG Velvet, LG G8 ThinQ, LG G7 ThinQ. But after accruing losses, it had to make a difficult decision to shut down its mobile businesses.
LG added that they will facilitate their mobile expertise to develop technology for communication like 6G. During the COVID-19, LG’s mobile devices had a tough competition and failed to grab the consumer’s attention in 2020. The market shares of LG smartphones increased only 7% since January’21.
This announcement has put an end to LG Electronic’s future for smartphone devices in the market.