- LG announced on Monday that it would close its mobile business unit.
- The decision shows how difficult it is to challenge the market leaders Apple and Samsung.
- Samsung established itself as one of Apple’s first challengers, preparing for long-term success.
- See more stories on the Insider business page.
LG is officially leaving the smartphone market.
The South Korean technology giant announced on Monday that it was moving out of the “highly competitive” smartphone business by closing its mobile unit, marking the end of an era for a company that was once a top-tier phone maker. .
His decision underscores how difficult it is to compete with industry giants like Samsung and Apple, especially in the United States, which is part of the third largest smartphone market.
LG has already been among the top five smartphone makers. But it failed to stand firm, as Samsung and Apple dominated the American market and companies like Huawei and Xiaomi gained market share abroad.
Together, Apple and Samsung account for 81% of the U.S. smartphone market, with Apple accounting for 65% and Samsung for 16% in the fourth quarter of 2020, according to Counterpoint Research. LG, meanwhile, was in third place with only 9% of the market, and Samsung and Apple were the only two smartphone companies to show growth in the U.S. during the fourth quarter of 2020.
Worldwide, Apple ranked first in the fourth quarter of 2020 with 23.4% of the market, while Samsung ranked second with 19.1%, according to International Data Corp.
Samsung and LG are longtime rivals in the electronics and home appliance industries, but there is a critical advantage that the former has that the latter does not when it comes to smartphones.
Samsung established its phones as the main competitors of the iPhone when the smartphone market was still quite young in 2012. At that time, it had a box office success in its hands with the Galaxy S3, which surpassed the iPhone 4S to become the smartphone best seller in 2012, according to Strategy Analytics.
The successful launch of the Galaxy S3 helped to form a narrative that the smartphone market had become a two-horse race between Apple and Samsung. This spawned headlines in vehicles like The New York Times, Vanity Fair and The Guardian, declaring the two tech giants as the winners of what has become the biggest change in computing in recent history.
No Android phone manufacturer had anything that approached the Galaxy S3’s popularity at the time. He put Samsung’s Galaxy S series on the map, making it the iPhone’s top contender for years to come.
And other Android phone manufacturers just couldn’t keep up, despite being more innovative in some ways. For example, tech critics praised HTC in 2013 for its attractive One M7 phone, which surpassed all Android phones on the market in terms of build quality and design. But it never had sales that matched those accolades, and HTC sold a portion of its smartphone business to Google in 2018.
Motorola’s original Moto X from 2013 was also ahead of its time with hands-free voice controls that preceded the Amazon Echo and was well received by reviewers. But Google sold Motorola’s mobile unit to Lenovo 2014, and the PC giant has struggled to increase its presence in the smartphone market.
Even Google, which operates Android, had a hard time entering the smartphone market. It started selling cheaper Pixel smartphones after it struggled to sell high-end phones designed to compete with Samsung’s iPhone and Galaxy S line.
LG followed a similar path. It was ahead of the competition in some ways, such as the decision to bring cameras with a wider field of view to its smartphones years before Apple and Samsung. But its smartphone division suffered losses totaling $ 4.5 billion in six years, which resulted in the decision to close the unit after Bloomberg said the electronics maker was unable to find a buyer. Instead, LG will focus on areas such as smart home devices, electric vehicle components, robotics and artificial intelligence.
Of course, the success of Samsung and Apple is just one element that has influenced the cell phone market, although it is a big one. Popular Chinese brands that stood out for their more affordable prices, such as Huawei, Xiaomi, Oppo and OnePlus, also grew in popularity at a time when LG’s market share started to drop around 2015, Gartner data provided to Insider indicated .
Still, Samsung and Apple have been comfortably at the top of the smartphone market for years, and LG is just the latest victim.