LG Quits Smartphones Business Following Stiff Competition From Chinese Rivals In The Cellphone Market
LG announced in April 2021 that it is exiting from the smartphone market after being in operation for more than a decade. The company said that this is a strategic decision which will allow LG to focus resources in growth areas such as electric vehicle components, connected devices, smart homes, robotics, artificial intelligence, and business-to-business solutions. While the market remains large and stable according to The Business Research Company’s research on the cellular telephone market, this exit is also a result of heavy competition in the mobile phones market, particularly with the surge of Chinese upstarts such as Xiaomi and Oppo. Once considered a rival to fellow South Korean manufacturer Samsung, LG has struggled to compete in the incredibly competitive mobile phones market in the recent years. LG’s position dwindled significantly from being among the top three smartphone makers in the world in 2013 to not even being among the top seven players globally in 2020. LG expects to have completed the business’ closure by the end of July 31, 2021. However, the company will not crash out of the industry completely and plans to continue to leverage its mobile expertise and develop mobility-related technologies such as 6G in the coming years.[i]
LG joins a list of high-profile mobile device makers including Nokia, HTC, and Blackberry, who have moved away from manufacturing smartphones over the years, although some have stuck around on devices made by third-party manufacturers. For example, HMD manufactures all handsets for Nokia, and HTC still continues to sell a few handsets, but had sold most of its IP to Google in 2017.[ii]
As per data on the Global Market Model, the global cellular telephone market size is expected to grow at a compound annual growth rate (CAGR) of 1.88% to reach $4.39 billion by 2023. Increase in disposable income is driving the cellular telephone market. Cellular telephones have now become a necessity in every household owing to advantages such as connectivity, productivity applications, entertainment, and education. With increasing disposable income, individuals are increasingly buying smartphones. Moreover, companies are manufacturing cellular devices that are affordable to purchase. For instance, in October 2019, HTC announced plans to manufacture affordable smartphones that support 5G. Rise in disposable income coupled with affordability increased the purchasing power of the individuals and in turn propelled the market for cellular telephones.
The global cellular telephone report by TBRC is segmented by type into smartphone, and feature phone, by age-group into under 18 years old, 18-45 years old, 45-60 years old, and above 60 years old, and by distribution channel into OEM, retailer, and e-commerce.
The Cellular Telephones Global Market Report is one of a series of new reports from The Business Research Company that provides cellular telephone market overviews, analyzes and forecasts cellular telephone market size, share, cellular telephone market players, cellular telephone market segments and geographies, the market’s leading competitors’ revenues, profiles and market shares.
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[i] https://edition.cnn.com/2021/04/05/tech/lg-electronics-exiting-smartphone-business-intl-hnk/index.html
[ii] https://www.theverge.com/2021/4/4/22346084/lg-exits-smartphone-business