South Korea's LG to completely withdraw from cell phone market

LG Electronics to become first major smartphone brand to exit global market

LG smartphone (Pixabay photo)

LG smartphone (Pixabay photo)

TAIPEI (Taiwan News) — South Korea's LG Electronics Inc. will close its mobile phone business after years of struggling to compete against the likes of Apple, Samsung, and Chinese rivals.

In a statement on Monday (April 5), the Seoul-based company announced that it would completely withdraw from the global smartphone business in July amid declining shipments and mounting losses. The move is set to make it the first major device manufacturer to bow out of the market.

With its global market share having shrunk to just 2 percent in 2020, LG described the closure of its mobile division as a "strategic decision" and said it will focus on other core areas such as vehicle components and robotics instead. It also explained that its withdrawal from smartphones could further strengthen its competitiveness in the long term.

In January, LG CEO Kwon Bong-seok reportedly sent out a message to staff hinting that the company might make a major change in the operation of its loss-making mobile sector. At the time, he assured that at least 60 percent of the employees would be relocated to other divisions.

Over the last five years, LG has seen a rapid decline in its shipments, reaching a total loss of US$4.5 billion, according to Reuters.

Often labeled as a smartphone pioneer, LG was a major player in the early years of the modern mobile phone revolution. At its peak in 2013, the company was the world's third-largest smartphone company based on sales, behind only Apple and Samsung.

Updated : 2021-04-10 20:38 GMT+08:00