South Korean electronics giant LG has announced it is shutting down its smartphone business as it struggles to keep up with competition from Apple, Samsung and Huawei.
The business will now concentrate on building electric-vehicle components and robotics manufacturing, as well as its home-appliances business, which fared well during the Covid-19 pandemic.
Why is LG doing this?
LG was, at one time, the world’s third-largest phone maker by shipments and is still the biggest US tech vendor after Apple and Samsung.
However, its overall phone business has fallen behind in the past six years and has been in the red for 23 quarters consecutively, with total losses exceeding $4.4 billion.
LG’s mobile business represented about 8% of its total annual revenue in 2020.
Why does this matter?
It was the original smartphone trailblazer. LG’s first touchscreen phone, the LG Prada, in 2006, preceded the iPhone.
Chinese smartphone brands like Huawei Xiaomi, Vivo and Oppo accounted for a record 57% combined market share in 2020.
This has seen LG’s global market share slip to the low single digits. The company shipped 24.7m devices in 2020, equivalent to a market share of just 1.9%.
Samsung currently leads in market share at 19.2%, followed by Apple at 15.1%. Huawei, at 14.1%, Xiaomi (10.9%) and Oppo (8.4%) close out the top five.