LG Electronics to withdraw from the smartphone market

by Joyce Lee and Heekyong Yang

SEOUL (Reuters) – LG Electronics on Monday said it would end its heavily loss-making mobile phone business in recent years, a move that will make the South Korean group the first major global smartphone maker to pull out of the market entirely. market.

This move by LG Electronics will leave rivals Apple and Samsung Electronics fighting to reclaim its 10% market share in North America, where LG is the third largest seller of smartphones.

In a statement, the South Korean firm stressed that its mobile telephony division had recorded nearly six years of losses, for a total of some 4.5 billion dollars, and that withdrawing from this ultra-competitive market would allow it to survive. focus on growth areas – electric vehicle components and connected devices in particular.

In more prosperous times, LG was one of the pioneers of mobile telephony, thanks to innovations like wide-angle cameras, and by 2013 established itself as the third largest smartphone manufacturer in the world behind Samsung and Apple. .

But thereafter, the flagship models of the group experienced hiccups, both at the computer and hardware level, which caused their popularity to decline. In the eyes of analysts, LG also lacked marketing expertise against its Chinese rivals.

According to Counterpoint data, LG Electronics currently accounts for only about 2% of the global telephony market, with 23 million phones shipped last year – compared to 256 million for Samsung, for comparison.

LG Electronics’ smartphone division is the smallest of the group’s five divisions, accounting for around 7% of its revenue. It should cease its activities by July 31.

South Korean workers in this division will be transferred to other LG businesses, the group said, while decisions on jobs outside South Korea will be made at the local level.

(French version Jean Terzian)

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