Fierce competition forces LG to exit China’s smartphone market

Reports indicate LG might shift its focus to Europe and North American market, where it looks to push its high-end phones.
Fierce competition forces LG to exit China’s smartphone market
Fierce competition forces LG to exit China’s smartphone market
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If you took a look at the performance figures of LG Electronics, South Korea, you may not believe that the company is withdrawing itself from the Chinese smartphone market. But this is true and it is official.

However one cannot say this was, in anyway, a sudden decision or move. LG has practically introduced no new phone in the Chinese market throughout 2017. The last phone it launched there was LG G5 SE. and ended up selling just 160,000 phones in the whole year in the world’s market for smartphones, China that sells some 480 million pieces a year.

As such, LG clocked a revenue of $55.4 billion, a record of sorts for the company and its year on year growth was also quite decent, but the smartphone vertical appears to be its Achilles’ heel. It has been posting consistent losses each quarter, though the company managed to cut down on the losses in the mobile phones business from $331.37 million, the previous quarter, to $192.33 million in the 4th quarter of 2017. Barely one quarter in the last ten could LG make profits; the rest went into losses only. Obviously, its record in the other product divisions like Home Appliances and Televisions appears to be far better.

Reports indicate LG might want to focus more on the markets in Europe and North America, where it could possibly push its high-end phones and not be overly worried about the pricing of the phones to stay in contention. But the competition in these markets is also quite fierce. Besides the leaders, Apple and Samsung, the Chinese phone makers Huawei and Xiaomi also offer strong competition in these markets.

Notwithstanding these developments, it is understood that the company is on its course to launch its next set of phones, the LG G7 and the LG V30+ in the market.

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