LG Electronics Shutting Down Smartphone Business Unit

LG Electronics has announced it is closing down its smartphone business after the division lost billions in recent years.

South Korea’s second-largest appliance firm was once considered a pioneer of the Android operating system, collaborating with Google on the Nexus series in the early 2010s.

However it has  struggled to increase sales, entering the market late and facing tough competition from emerging Chinese rivals including Huawei.

LG had made many innovations including ultra-wide angle cameras, rising to third largest smartphone maker in 2013.

According to research firm Counterpoint, LG last year it shipped 28 million phones, which compares with 256 million for Samsung. 

In a statement, LG says the smart phone division has “failed to produce results” amid “intensifying price competition among major competitors in the entry-level mobile phone market. 

“The decision will enable the firm to “focus resources in growth areas such as electric vehicle components”, robotics and smart homes.”

The unit has recorded losses for 23 consecutive quarters since 2015, with the cumulative deficit reaching about 5 trillion won ($4.4 billion) by the end of last year.

The smartphone business is the smallest of LG’s five divisions, accounting for just 7.4% of revenue.

Currently its global mobile phone market share is about 2%.