© Reuters
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LG Electronics will close its mobile division after losing billions of dollars and finding no one to buy it. This will make the South Korean company the first to withdraw a major brand from the smartphone market when the process is completed, probably on July 31. Names like Nokia, HTC and Blackberry have disappeared from the top of this business, but have not yet left it.
Over the past 6 years, LG’s smartphone losses have totaled $ 4.5 billion, and the withdrawal from a fiercely competitive sector and the transfer of employees to other divisions will allow the company – according to its announcement – to focus on components for electric vehicles, connected devices and “smart “housing.
In better times, LG stood out with innovations in smartphones such as wide-angle cameras, and in 2013 it reached the third place in production in the world after “Samsung” (Samsung) and “Apple” (Apple).
But then the company’s devices faced problems, slow software updates and criticism that it lacked marketing skills like Chinese competitors.
Today, LG occupies only 2% of the global market and sent 23 million smartphones to retailers last year, while Samsung has more than 10 times more – 256 million, according to Counterpoint.
North America is where LG has a more solid presence with a third position and 10% of the market. Now Samsung Electronics and Apple will fight for this niche, as the American company has an advantage because the South Koreans are not very strong in the segment of smartphones with medium or very low prices.
Chinese rivals such as Oppo, Vivo and Xiaomi do not have a significant US presence due to the sanctions, but are likely to attack LG’s niche in Latin America.
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