LG said yesterday that the company will shut down its mobile phone business amid intensified competition and years of losses. The South Korean tech firm took these steps after facing losses for six consecutive years.
According to a report by the Taiwan Economic Daily, TrendForce stated that LG mobile phones can neither compete with Apple or Samsung for the high-end market nor can they beat domestic mobile phone brands in the low-end market.
LG’s original market is most likely to be grabbed by Samsung and Oppo. The report pointed out that in order to avoid continued losses, LG ended its mobile phone business not unexpectedly.
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As LG’s main markets for mobile phone products are in South Korea, Europe, and Southeast Asia, its European and South Korean markets are expected to be replaced by Samsung, and the emerging mid-to-low-end mobile phone market in Southeast Asia is expected to be replaced by Oppo.
The shutdown of LG’s mobile phone business is expected to be completed before July 31 this year, after which some existing models of inventory may still be sold.
Since the second quarter of 2015, LG’s mobile phone business has been at a loss. Last year, the cumulative operating loss reached 5 trillion won (approximately 29.085 billion yuan).
