LG is abandoning the smartphone business, which has helped pioneers give up its mobile ambitions after Apple և Samsung pushed brands like Huawei to the upper end of the spectrum.
Instead, it will focus on connected devices, electric vehicle parts, robotics and smart home offerings. This was announced on Monday by the South Korean company. “As we move forward, LG will continue to use its mobile experience to develop mobility technologies such as 6G to further strengthen competition in other areas of business.”
LG’s exit marks a sharp decline, which took it to become one of the world’s leading smartphone makers with a share of less than 2%. Like other legacy players, such as Nokia և BlackBerry, it lost ground as competition intensified.
“They went from being innovative to significant lagging behind,” said Dan Ives, chief executive of stock research at Wedbush Securities. “From the sleek phones to the LG Wing to other innovations that seemed good on paper, consumers were honestly backing down.”
More than 1.3 billion smartphones were sold worldwide last year, an estimated 12.5% drop due to the coronavirus epidemic and the economic downturn of consumers who keep their phones longer. “Global sales are still expected to reach $ 2.5 trillion over the next five years,” Ives said. “I think they looked in the mirror and snatched the band’s help,” he said, choosing instead to focus on their more successful home-based robotics activities.
As users tend to stick to iOS or Android operating systems, manufacturers of Android devices such as Samsung և Xiaomi are likely to benefit from LG leaving.
On the world stage, Apple leads about 19% of the global market, followed by Samsung with 15%.
As the company completes its smartphone business, LG said it will continue to provide service support and software updates for customers who have been using existing phones for some time but have not set specific deadlines. The company did not elaborate on the possible reductions as a result of the termination, saying only that “job details will be decided at the local level.”
LG said it expects to exit the mobile business by the end of July, but after that customers can find available models for sale.
LG planned to make its smartphone business profitable this year. At CES in January, the largest showcase in the technology industry, the company unveiled the idea of a new model with a portable screen, in which the display expands to a smaller tablet. The flashy innovation was seen as a response to Samsung’s folding phones. But LG’s mobile movement stops the mobile series.
The announcement comes as loyal customers of another legacy smartphone brand await the kind of rebirth. Texas startup OnwardMobility will license the BlackBerry brand for this year’s new device, which will run Android և physical keyboard ads.
BlackBerry attracted a lot of attention earlier this year when investors tried to buy a stake in the stock, including GameStop և AMC, which was gaining momentum in trading forums և with huge prices. While BlackBerry shares fell above $ 25 a barrel in January, the company is still more than doubled its value by about $ 8 a year earlier.
In recent years, smartphone makers have encountered the habit of changing their customers as people keep their expensive devices longer rather than keeping up with the latest updates. It has hurt the markers of smartphones, which partly reacted to the rise in prices.
As for LG’s mobile business, consumers have not always responded to hardware innovations. In parallel with the competition for the purchase of devices, Chinese manufacturers, including Xiaomi և Oppo, continue to gain great interest among consumers, claiming 11% of the world market և 8% in 2020. , respectively, according to Gartner.