LG exits smartphone biz amid stiff competitors

Chennai: South Korean electronics maker LG introduced on Monday that it’s shutting its ailing smartphone enterprise by July 31 to give attention to its key strengths after it did not penetrate the market.
“LG’s strategic decision to exit the incredibly competitive mobile phone sector will enable the company to focus resources in growth areas such as electric vehicle components, connected devices, smart homes, robotics, artificial intelligence and business-to-business solutions, as well as platforms and services,” the corporate mentioned in an announcement.
The client electronics maker, whose smartphone enterprise accounts for roughly 7% of its whole income, mentioned it would proceed to offer service help and software program updates for present prospects “for a period of time which will vary by region.”
Details on layoffs and employees restructuring of the cell enterprise “will be determined at the local level,” LG mentioned.
A spokesperson for LG in India advised TOI that present prospects ought to proceed utilizing their smartphones as it would proceed offering warranties, software program updates and help. “This decision allows us to apply the assets, knowledge and expertise gained over years toward other areas such as IoT,” the spokesperson added.
In India, the market share of LGs smartphones has been stagnant at a miniscule 0.2% for a number of years now. With a powerful function telephone line-up previous to the smartphone period, LG was as soon as touted as a key competitors to Korean main Samsung. However, submit 2010, LG’s merchandise have been extra tuned in direction of North America, Latin America and Korea, and the main target was not a lot on India, analysts mentioned.
Talks of both a sale or closure of its smartphone enterprise unit have been occurring for nearly a 12 months. Despite the benefit of being vertically built-in, the corporate couldn’t raise the gross sales of its cell units. As a big electronics maker, LG had in-house entry to shows ( LG show), digicam ( LG innotek), LG chem ( batteries), amongst different elements. “While they are quite good in terms of design language like a minimalistic design plus camera etc., the diffusion of features towards lower price point is what they couldn’t do. They had access to great technology and products but the go-to-market strategy and right portfolio is what seemed missing [in India],” Tarun Pathak, affiliate director, Counterpoint Research, mentioned.
“LG’s strong mobile R&D and innovation capabilities, especially its recent forays in reinventing the rectangular slab are laudable. Unfortunately for LG, its innovation prowess could not be translated into enduring market wins,” Prabhu Ram, head – business intelligence, CMR India, mentioned.

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