Citing mounting losses, LG Electronics has announced that it is discontinuing its smartphone brand.
The South Korean electronics company says it is winding down its mobile division after failing to find a buyer for it. LG becomes the first major smartphone brand to completely withdraw from the global market.
LG’s decision will leave its 10% market share in North America, where it is the number three smartphone brand, to be taken over by Samsung Electronics and Apple.
LG’s smartphone division has logged nearly six years of losses totaling $4.5 billion U.S. Dropping out of the fiercely competitive sector would allow LG to focus on growth areas such as electric vehicle components, connected devices and smart homes, the company said in a written statement.
LG had been early to market with a number of cell phone innovations, including wide angle cameras. But its flagship smartphones suffered from both software and hardware issues, which, combined with slower software updates, saw the brand steadily fall out of favour with consumers.
While other well-known mobile brands such as Nokia (NYSE:NOK) and Blackberry (NYSE:BB) have also fallen in popularity, they have yet to disappear completely. LG’s current global share of the smartphone market is only about 2% It shipped 23 million smartphones last year, which compares with 256 million for Samsung, according to market research firm Counterpoint.
LG’s smartphone division, the smallest of its five divisions accounting for about 7% of global revenues, is expected to be wound down by July 31 of this year.