- LG announced on Monday that it will close its mobile business unit.
- The decision shows how difficult it is to challenge market leaders Apple and Samsung.
- Samsung has established itself as an early challenger to Apple and achieved this in the long run.
- See more stories on Insider’s business page.
LG is officially bending out of the smartphone market.
The South Korean technology giant announced on Monday that it would leave the ‘extremely competitive’ smartphone business by closing its mobile unit, marking the end of an era for a business that was once a leading device maker.
The decision underscores how difficult it is to compete with giants in the industry such as Samsung and Apple, especially in the US, which is part of the third largest smartphone market.
LG was once among the top five smartphone manufacturers. But it could not stand its man as Samsung and Apple dominated the US market and companies like Huawei and Xiaomi snatched up the market share abroad.
Together, Apple and Samsung account for 81% of the U.S. smartphone market, with Apple accounting for 65% and Samsung accounting for 16% from the fourth quarter of 2020, according to Counterpoint Research. LG, meanwhile, finished third with just 9% of the market, and Samsung and Apple were the only two smartphone companies to show growth in the US during the fourth quarter of 2020.
Worldwide, Apple topped No. 1 in the fourth quarter of 2020 with 23.4% of the market, while Samsung topped No. 19.1%, according to International Data Corp.
Samsung and LG have been rivals in the electronics and home appliances for years, but the former has a critical advantage that the latter lacks when it comes to smartphones.
Samsung established its phones as the leading competitors of the iPhone when the smartphone market was still quite young in 2012. At the time, the Galaxy S3, which surpassed the iPhone 4S to become the best-selling smartphone, had a big hit on its hands had. in 2012, according to Strategy Analytics.
The successful launch of the Galaxy S3 helped form a narrative that the smartphone market has become a two-horse race between Apple and Samsung. It fueled news in outlets such as The New York Times, Vanity Fair and The Guardian, declaring the two technology giants as the winners of what has become the biggest computer shift in recent history.
No Android phone maker at the time had anything that came close to the popularity of the Galaxy S3. This put Samsung’s Galaxy S series on the map, which would make it the main competitor of the iPhone in the coming years.
And other Android phone makers simply could not keep up, although in some ways they were more innovative. Technical critics praised HTC in 2013, for example, for its striking One M7 phone, which surpassed every Android phone on the market in terms of build quality and design. But it has never had the sales that match the honors, and HTC sold part of its smartphone business to Google in 2018.
Motorola’s original 2013 Moto X was also ahead of its time with hands – free voice controls that preceded the Amazon Echo and were well received by reviewers. But Google sold Motorola’s mobile unit to Lenovo in 2014, and the computer giant struggled to promote its presence in the smartphone market.
Even Google, which runs Android, has had a tough time breaking into the smartphone industry. It aimed to sell cheaper Pixel smartphones after having problems selling high-end phones designed to compete with the iPhone and Samsung’s Galaxy S series.
LG has followed a similar path. This was in some ways ahead of competitors, such as the decision to bring cameras with a wider field of view to its smartphones years before Apple and Samsung did so. But the smartphone division incurred losses totaling $ 4.5 billion over six years, leading to the decision to close the unit after Bloomberg reported that the electronics manufacturer could not find a buyer. LG rather focuses on areas such as smart devices, components for electric vehicles, robotics and artificial intelligence.
Of course, the success of Samsung and Apple is just one element that is influencing the market for mobile phones, albeit a big one. Popular Chinese brands that stood out for their more accessible price points, such as Huawei, Xiaomi, Oppo and OnePlus, also rose in popularity around the time LG’s market share began to slide around 2015, Gartner information revealed to Insider.
Still, Samsung and Apple have been comfortably at the top of the smartphone market for years, and LG is just the latest casualty.