South Korea’s LG Electronics Inc is to wind down its loss-making mobile division after failing to find a buyer, a move that would make it the first major smartphone brand to completely withdraw from the market.
Its decision to pull out will leave its 10 percent share in North America, where it is the No. 3 brand, to be gobbled up by Samsung Electronics Co 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,” Hi Investment & Securities Co analyst Ko Eui-young said.
Photo: AFP
LG’s smartphone division has logged nearly six years of losses totaling about US$4.5 billion.
Dropping out of the fiercely competitive sector would allow LG to focus on growth areas such as electric vehicle components, connected devices and smart homes, it said in a statement.
In better times, LG was early to market with a number of cellphone innovations including ultra-wide-angle cameras and at its peak in 2013, it was the world’s third-largest smartphone manufacturer behind Samsung and Apple.
Later, its flagship models suffered from software and hardware mishaps, which combined with slower software updates saw the brand steadily slip in favor. Analysts have also criticized the company for lack of expertise in marketing compared with Chinese rivals.
While other well-known mobile brands such as Nokia Oyj, HTC Corp (宏達電) and BlackBerry Ltd have also fallen from lofty heights, they have yet to disappear completely.
LG’s current global share is only about 2 percent. It shipped 23 million phones last year, which compares with 256 million for Samsung, according to research provider Counterpoint.
In addition to North America, it does have a sizeable presence in Latin America, where it ranks as the No. 5 brand.
LG’s smartphone division, the smallest of its five divisions accounting for about 7 percent of revenue, is expected to be wound down by July 31.
In South Korea, the division’s employees would be moved to other LG Electronics businesses and affiliates, while elsewhere decisions on employment would be made at the local level.
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 would 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 would provide service support and software updates for customers of existing mobile products for a period of time that would vary by region, it said.
LG shares have risen about 7 percent since a January announcement that it was considering all options for the business.
Talks to sell part of the business to Vietnam’s Vingroup JSC fell through due to differences about terms, sources with knowledge of the matter have said.
Among the rows of vibrators, rubber torsos and leather harnesses at a Chinese sex toys exhibition in Shanghai this weekend, the beginnings of an artificial intelligence (AI)-driven shift in the industry quietly pulsed. China manufactures about 70 percent of the world’s sex toys, most of it the “hardware” on display at the fair — whether that be technicolor tentacled dildos or hyper-realistic personalized silicone dolls. Yet smart toys have been rising in popularity for some time. Many major European and US brands already offer tech-enhanced products that can enable long-distance love, monitor well-being and even bring people one step closer to
Malaysia’s leader yesterday announced plans to build a massive semiconductor design park, aiming to boost the Southeast Asian nation’s role in the global chip industry. A prominent player in the semiconductor industry for decades, Malaysia accounts for an estimated 13 percent of global back-end manufacturing, according to German tech giant Bosch. Now it wants to go beyond production and emerge as a chip design powerhouse too, Malaysian Prime Minister Anwar Ibrahim said. “I am pleased to announce the largest IC (integrated circuit) Design Park in Southeast Asia, that will house world-class anchor tenants and collaborate with global companies such as Arm [Holdings PLC],”
TRANSFORMATION: Taiwan is now home to the largest Google hardware research and development center outside of the US, thanks to the nation’s economic policies President Tsai Ing-wen (蔡英文) yesterday attended an event marking the opening of Google’s second hardware research and development (R&D) office in Taiwan, which was held at New Taipei City’s Banciao District (板橋). This signals Taiwan’s transformation into the world’s largest Google hardware research and development center outside of the US, validating the nation’s economic policy in the past eight years, she said. The “five plus two” innovative industries policy, “six core strategic industries” initiative and infrastructure projects have grown the national industry and established resilient supply chains that withstood the COVID-19 pandemic, Tsai said. Taiwan has improved investment conditions of the domestic economy
Sales in the retail, and food and beverage sectors last month continued to rise, increasing 0.7 percent and 13.6 percent respectively from a year earlier, setting record highs for the month of March, the Ministry of Economic Affairs said yesterday. Sales in the wholesale sector also grew last month by 4.6 annually, mainly due to the business opportunities for emerging applications related to artificial intelligence (AI) and high-performance computing technologies, the ministry said in a report. The ministry forecast that retail, and food and beverage sales this month would retain their growth momentum as the former would benefit from Tomb Sweeping Day