South Korea based LG Electronics Inc to end production of smartphones. The company will turn down its loss-making smartphone division. The multinational electronics company to make a major move of completely withdrawing itself from the smartphone business.
The company's decision to pull out itself from the market will leave its 10% share in North America. It is the No. 3 brand in smartphone after titans Apple Inc and Samsung Electronics. The group says that for nearly six years the company is bearing losses that total around $4.5 billion. The decision of dropping out of the widely competitive sector would allow LG to focus on other growth areas such as electric vehicle components, connected devices, and smart homes. By the way, it's not that company never earned profit, in better times, LG was early to market with a number of cell phone innovations including ultra-wide-angle cameras. Also, South Korean company was once in the year 2013 was the world's third-largest smartphone manufacturer behind Samsung and Apple. Analysts criticized the company for its lack of expertise in marketing compared to its Chinese rivals. Park Sung-soon, an analyst at Cape Investment & Securities said "In South America, Samsung and Chinese companies such as Oppo, Vivo, and Xiaomi are expected to benefit in the low to mid-end segment."
While the smartphone business has other well-known mobile brands such as Nokia, HTC, and Blackberry who also have fallen from lofty heights but yet to disappear completely. In South Korea, the division's employees will be moved to other LG Electronics businesses and affiliates while elsewhere decisions on employment will be made at the local level. Though LG will provide service support and software updates for customers of existing mobile products for a period of time which may vary by region.