LG becomes the first major smartphone brand to withdraw from the market

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LG becomes the first major smartphone brand to withdraw from the market
LG becomes the first major smartphone brand to withdraw from the market

South Korea’s LG Electronics Inc will wind down its loss-making mobile division after failing to find a buyer, a move that is set to make it the first major smartphone brand to completely withdraw from the market.

Its decision to pull out will leave its 10% share in North America, where it is the No. 3 brands, to be gobbled up by Samsung Electronics and Apple Inc with its domestic rival expected to have the edge.

“In the United States, LG has targeted mid-priced – if not ultra-low – models and that means Samsung, which has more mid-priced product lines than Apple, will be better able to attract LG users,” said Ko Eui-Young, an analyst at Hi Investment & Securities.

Analysts said they were told in a conference call that LG plans to retain its 4G and 5G core technology patents as well as core R&D personnel, and will continue to develop communication technologies for 6G. It has yet to decide whether to license out such intellectual property in the future, they added.

LG will provide service support and software updates for customers of existing mobile products for a period of time which will vary by region, it added.

Talks to sell part of the business to Vietnam’s Vingroup fell through due to differences about terms, sources with knowledge of the matter have said.

LG shares have risen about 7% since a January announcement that it was considering all options for the business.

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