LG quits smartphone business after years of losses

LG quits smartphone business after years of losses
LG quits smartphone business after years of losses
After several years of accumulated losses and lost battles against the industry giants, South Korean LG will abandon the smartphone business to focus on other growth areas, such as the production of vehicle components.

“We are going to close the production and sales of the mobile phone business due to its continued decline in a context of tighter competition,” the company announced in a statement. “We will improve our business portfolio by concentrating our resources efficiently in the main areas”.

In the information to the regulator, LG added that the exit of the smartphone business will improve its competitiveness and financial situation in the long term, but could, however, affect sales in the short term.

LG faced increasing competition from Chinese manufacturers in the lower segments, and was completely overtaken by Apple and Samsung in the premium segment.

According to data from Counterpoint, cited by the Financial Times, LG’s smartphone business has accumulated losses of nearly $ 4.5 billion over the past five years, with its market share dropping to around 2%.

This unit recorded revenues of $ 4.6 billion in 2020, 8.2% of LG’s total revenues.

Source

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