LG’s exit marks the decline it pulls from being one of the world’s leading smartphone makers to running with less than 2 percent of the same share as other older players. Like Nokia and BlackBerry, it lost its footing due to fierce competition.
“They went from innovators to major lag,” said Dan Ives, managing director of equity research at Wedbush Securities. “From foldable phones to LG Wing to other innovations that seem to be good on paper. Consumers were frankly dissatisfied. “
More than 1.3 billion smartphones were sold last year around the world, a 12.5 percent drop due to the economic disruption of the coronavirus epidemic and longer-held consumers. However, global sales are expected to hit $ 2.5 trillion over the next five years. “I think they look in the mirror and tear Band-Aid off,” he said, choosing to focus on the operations that are being done. More success in home entertainment and robotics
As users tend to stick with the iOS or Android operating systems, manufacturers with Android-powered devices such as Samsung and Xiaomi may benefit from LG’s departure.
Apple dominates around 19 percent of the global market, followed by Samsung’s 15 percent share.
As the company terminates the smartphone business, LG said it will continue to provide support, services and software updates for customers who own their mobile phones for a period of time. The company also did not elaborate on the layoffs that might occur as a result of the shutdown, stating simply that. “The employment-related details will be determined at the local level”
LG said it expects to exit the mobile phone business by the end of July. But customers may be able to find existing models for sale after that.
LG plans to pull its smartphone business into profit this year. In January at CES, the tech industry’s biggest show, the company showed ideas for a new model with a foldable screen whose display will expand to a mini-tablet. The flashy innovation was seen as a response to Samsung’s foldable phones, but the shutdown on LG’s handsets ended the foldable lineup.
The announcement comes as another regular customer of the older smartphone brand is waiting for a revival. OnwardMobility The Texas-based startups will be giving BlackBerry-branded licenses to new devices expected this year that will run on Android and use the trademark keyboard.
BlackBerry gained widespread attention earlier this year as investors sought to buy a series of stocks, including GameStop and AMC, which were backed on trading forums and recorded significantly higher prices. Although BlackBerry’s stock fell from its $ 25 peak in January, the company still trades for more than double its value at about $ 8 last year.
In recent years, smartphone manufacturers have faced shifting customer habits as people have been using their devices for a long time rather than indulging in the latest upgrades. That affected the smartphone’s mark, which partially responded with price hikes.
And, like LG’s mobile business, consumers are not always responsive to hardware innovation. Besides the competition in buying the device, Chinese manufacturers including Xiaomi and Oppo continue to gain traction from consumers, claiming about 11 percent and 8 percent of the global market in 2020, respectively.