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Apple and Samsung strengthen market dominance as LG quits

The news that South Korea’s LG Electronics is exiting the mobile phone market, with plans to wind down its mobile phone business by the end of July, came as no surprise to analysts.

LG has struggled in the US accounting for just 9 per cent of the market, compared to market leader Apple with over 65 per cent. Both Apple and Samsung were also the only device OEMs to record growth in the fourth quarter of 2020.

In terms of the global market while Apple, Samsung and Huawei continue to dominate, LG has struggled even trailing behind the likes of Oppo, Xiaomi and vivo in the Chinese market. As a consequence it's seen losses of $4.5bn from its mobile unit over the past six years, a rate that was clearly unsustainable. Even attempts to sell the business have failed.

LG said that it’ll now focus on areas such as, “electric vehicle components, connected devices, smart homes, robotics, AI and business-to-business solutions, as well as platforms and services," and would continue to leverage its mobile expertise. Core technologies developed over the past 20 years would also be retained and, “applied to existing and future products.”

While it can be seen as a sensible decision, LG’s withdrawal from the market means that Apple and Samsung have further strengthened their market dominance, for good or ill, and has raised some concerns with analysts, Recon Analytics, warning that, “For all intents and purposes, we are on the way to a device duopoly in the US.”

Author
Neil Tyler

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