What LG's sign-off from mobile biz means for India

Korean electronics maker LG’s decision to exit from the mobile phone business will not lead to any major disruption in the Indian market as the company had failed to gain much share and its revenue from the business was miniscule, analysts and industry executives said.LG Electronics Inc announced that it is closing its mobile business unit globally which was approved by its board of directors on Monday. The company said its decision to exit the “incredibly competitive mobile phone sector” is to focus resources in growth areas such as electric vehicle components, connected devices, smart homes, robotics, artificial intelligence, business-to-business solutions, platforms and services.The country’s largest appliance maker, LG had less than 1% share in the Indian smartphone market. As per cellphone industry tracker Counterpoint Researcher, LG had 0.3% share in 2020 which had marginally improved from 0.15% share in 2019 due to good performance in last festive sale.Counterpoint’s associate director Tarun Pathak said LG’s share was largely stagnant at 0.15%. “LG’s success at larger consumer appliances couldn’t lift the sale of mobile devices. In fact, it was sandwiched between competitive entry to mid-tier offerings from Chinese brands and Apple, Samsung, OnePlus in the premium segment,” he said.LG India had tried multiple times to relaunch the business in India under multiple business heads, changes in distribution strategy which off-late was focused on e-commerce and large chains, and products which were mostly mid-to-premium segment in the last one year.Pathak said being vertically integrated, LG had access to some great technology and products, but go-to-market strategy and the right product portfolio were missing.LG India’s mobile phone business team was reduced from around 100-odd executives a year back to around 35-people right now headed by Advait Vaidya. An industry executive said these people will be absorbed in other functions within the company.The story will be updated with LG India’s comments, if any. In a global press release, LG said the winding down of the mobile phone business is expected to be completed by July 31 although inventory of some existing models may still be available after that. The company said it will provide service support and software updates for customers of existing mobile products for a period of time which will vary by region.LG also said going forward it will continue to leverage its mobile expertise and develop mobility-related technologies such as 6G to help further strengthen competitiveness in other business areas. Core technologies developed during the two decades of LG’s mobile business operations will also be retained and applied to existing and future products, it said.

from Economic Times https://ift.tt/3wudyrW