Daily Management Review

LG leaves mobile phones market


South Korea's LG Electronics has announced that it will stop manufacturing and selling smartphones. The company entered the market in 2013 and became the world's third-largest smartphone manufacturer after Samsung Electronics and Apple, but the business has been generating losses for the past six years.

South Korea's LG Electronics said on Monday it would stop manufacturing and selling smartphones, Reuters reported. 

LG said in January 2021 that it was considering all options to grow the business after nearly six years of losses of nearly $4.5 billion. Negotiations to sell part of the business to Vietnam's Vingroup fell apart over disagreements over the terms of the deal, sources familiar with the matter said. 

LG ranks third in North America and fifth in Latin America by market share, with a worldwide share of only about 2%. The company shipped 23 million mobile phones last year, according to research provider Counterpoint. By comparison, Samsung shipped 256 million smartphones.

The smartphone division is the smallest in terms of revenue out of LG's five divisions, accounting for just 7.4% of revenue in the fourth quarter of 2020. LG is expected to retain its mobile technology for use in its appliance and automotive components business. Late last year, the company launched a joint venture with automotive supplier Magna Internationa, for which it will produce key electric vehicle components.

source: reuters.com