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So LG is going to take down its mobile division after failing to find buyers. With this step, LG will become the first among all the smartphone brands to completely withdraw from the market.
Now let us dig a little deep!
Okay, this means that it is going to leave its 10 percent share in North America. LG comes at the third spot in the region where it will be taken over by Apple and Samsung Electronics along with other small players.
The division will be most probably rolled back by July 31, 2021. However, the company aims to sell the current models of LG. Moreover, the tech giant also released a statement claiming, “the strategic decision to exit the incredibly competitive mobile phone sector will enable the company to focus resources in growth areas such as business-to-business solutions, robotics, electric vehicle components, smart homes, connected devices, and artificial intelligence.”
Strategy Analytics, a research firm, said that back in 2013, LG was among the top smartphone makers of the world. In fact, it was the third-largest in the world just after Samsung and Apple. Today, the statistics say that the smartphone division of LG has lost around US$4.5 Billion for six years. During good times, LG was among the pioneers to introduce many innovations in cell phones especially the ultra-wide-angle cameras.
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However, certain features of its flagship models caused the brand image to suffer. For example, slow software updates and overall errors in software, as well as hardware, started surfacing. The company has also been criticized for the lack of proficient knowledge and expertise on the marketing side. True that the story of LG resembles that of Blackberry, HTC, and Nokia in that they too fell from the pinnacle of success but none of them has disappeared from the market.
Presently, the global share of LG is only two percent. According to Counterpoint, a research provider, last year, the company shipped about 23 million phones which is much less as compared to Samsung’s 256 million. Still, the smartphone unit of LG accounted for seven percent of the revenue.
The plans of the company include moving the employees in South Korea to LG Electronics businesses and other affiliates. Moreover, the decisions regarding the status of other employees elsewhere will be made locally.
Good luck, LG!