LG to exit smartphone market after $6b in losses

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Korean electronics company LG is giving up on making smartphones after the once-mighty manufacturer was unable to keep up with increasing intense competition from Chinese rivals.

LG, which was once the world's third-biggest mobile phone manufacturer, said it would stop making phones by the end of July, adding to a graveyard of phone makers such as Nokia, BlackBerry and Motorola.

LG's smartphone unit has not made a profit for almost six years and has racked up losses of around $4.5 billion ($6.0b) in that time.

An early mover in smartphones, it launched a device with a touchscreen before the iPhone but was late to fully embrace Google's Android operating system, allowing Samsung to gain an early advantage from which its Korean counterpart has never recovered.

Its market share in mobile phones peaked in 2009, before smartphones became ubiquitous, and it was the world's third-biggest manufacturer as recently as 2013.

However, in recent years it has struggled to keep up with Chinese rivals such as Huawei, Oppo and Xiaomi. It sold an estimated 23m phones last year, around 2 per cent of the global total, although it has remained the third biggest seller in the US, where it has around 10 per cent of the market.

LG said that its existing inventory of phones would continue to be available for some time and that it would provide software and security updates for a period.

It said leaving the smartphone business would allow it to focus on growing areas such as electric vehicle parts, robotics and smart home devices. It also said it would continue to work on areas such as 6G mobile network technology.

Apple and Samsung, the world's two biggest smartphone sellers, account for more than a third of sales, while a handful of Chinese manufacturers - Xiaomi, Oppo, Vivo and Huawei - follow, according to Counterpoint Research.

While Huawei's market share has slipped significantly in recent months due to US sanctions hitting its supply of processors, it has largely been supplanted by other Chinese companies.