South Korea’s LG Electronics says it will close its smartphone business after years of struggling to compete against rivals.
The Seoul-based group announced on Monday that it would formally exit the industry to enable it to focus on growth areas such as vehicle components.
Financial Times reports that LG has lost ground in smartphones as the global market has become more saturated.
It has also faced pressure from cheaper Chinese competitors in the low-to-mid end segment while being outmanoeuvred by Apple and local rival Samsung Electronics in the premium part of the market.
The company’s mobile phone business has posted cumulative losses of nearly $4.5bn over the past five years, with its global market share falling to about 2 per cent, according to research provider Counterpoint.
“We will end production and sales of the mobile phone business due to its continued slump amid stiffer competition,” the company said in a regulatory filing. “We will improve our business portfolio by efficiently focusing our resources on core areas.”
The company added that its withdrawal from smartphones would improve its competitiveness and financial status in the long term, although the decision could dent short-term sales.
