Monday Apr 05, 2021
SEOUL: South Korea’s LG Electronics Inc becomes the first brand to completely withdraw from the market as it failed to buy a buyer for its loss-making mobile division.
Its decision to pull out will leave its 10% share in North America, where it is the Number 3 brand, to be gobbled up by Samsung Electronics and Apple Inc with its domestic rival expected to have the edge.
“In the United States, LG has targeted mid-priced - if not ultra-low - models and that means Samsung, which has more mid-priced product lines than Apple, will be better able to attract LG users,” said Ko Eui-Young, an analyst at Hi Investment & Securities.
LG’s smartphone division has logged nearly six years of losses totaling some $4.5 billion. Dropping out of the fiercely competitive sector would allow LG to focus on growth areas such as electric vehicle components, connected devices, and smart homes, it said in a statement.
In better times, LG was early to market with a number of cell phone innovations including ultra-wide-angle cameras and at its peak in 2013, it was the world’s third-largest smartphone manufacturer behind Samsung and Apple.
But later, its flagship models suffered from both software and hardware mishaps which combined with slower software updates saw the brand steadily slip in favour. Analysts have also criticised the company for its lack of expertise in marketing compared to its Chinese rivals.