Goodbye to LG mobiles. It had been rumored in previous weeks and LG Electronics has confirmed it in a brief statement where it announces the exit of the mobile industry business for “Focus on growing sectors, including electric vehicles, IoT and B2B solutions”.
The mobile industry ‘takes no prisoners’. The entry into the scene of the first iPhone was a revolution at all levels and those who were then the giants of the sector could not keep up. The best known case was that of Nokia, but in the same way they had to leave the market and ended up absorbed by other Motorola or BlackBerry companies. Others like HTC, in the top-5 in their day, are today a residual company.
In the last decade, the entry of Chinese manufacturers (Xiaomi, OPPO, ZTE …), with an outstanding price / performance ratio, have put companies that did not have the smartphone as their main product, but had in the past, against the ropes a noteworthy market share. This includes LG Electronics, a company undervalued like few in mobile phones with some great series and notable innovations, but which has definitely not been able to survive in a brutal, super-competitive market.
Goodbye to LG mobiles
LG Electronics exits the mobile market globally after its mobile division has reflected red numbers the last five years. The decision was rumored strongly after the presentation of first quarter results. LG has accumulated losses of 4,300 million dollars in the last five years and specifically since the second quarter of 2015.
The decision was approved this Monday by its board of directors and communicated to the South Korean stock market regulator. No additional operations such as sale of the entire division or of patents and IPs have been reported. Instead, the company says that “Apply core technologies developed during two decades of mobile business operations to existing and future products”. We do not rule out a subsequent sale operation, which the South Korean firm has been seeking in recent months.
LG says it expects to complete the liquidation of its mobile business on July 31, 2021. Except for some models in stock, that is the official date where LG phones will go down in history. “LG will work closely with suppliers and partners throughout the process of closing our mobile phone business”. Details regarding the templates will be determined locally, it explains in the statement.
LG will offer software updates and technical support customers of existing mobile products for a period of time that “will vary by region,” they say.
Goodbye to LG mobiles. It’s been almost 25 years, since its entry into the sector occurred in 1996, reaching third place in the world behind Samsung and Apple a decade ago. Currently, it was ranked number nine by manufacturers with just a 2 percent global market share. A shame because we have really enjoyed some of their models, but the current situation in the mobile industry is what it is, with Chinese manufacturers sweeping the market and where only Samsung and Apple are able to stand up to them.