LG, the South Korea based consumer electronics company just announced its financial results for 2017 and it looks like the company is taking a huge decision to pull out from the smartphone business in certain markets. Reports coming out of China now state that the company is exiting from the Chinese smartphone market for good.
LG has gone ahead with this decision after experiencing high loss and managing to get an only meager gain in the first quarter of 2017. As per the results, LG managed to push only 13.9 million smartphones in 2017. It's mobile division generated USD10.52 billion in sales in 2017, but the company experienced losses in the last quarters.
According to reports, in 2016 LG was able to sell only 160,000 units in China out of an estimated 480 million total shipments. Moreover, the company didn't launch any new smartphone in China in 2017. If we recall the last device that the company brought to the Chinese market was the LG G5 SE which was launched way back in May 2016.
And just a few days back, the company's executive was quoted as saying, "LG mobile phone business has quit China." Apart from the small profit in 1Q17, LG's mobile division suffered losses for the last 11 straight quarters. Further, the company has said that there is an intense competition from the Chinese players and that the smartphone market in the country had more or less reached its saturation point where even new players are getting their hands on the market share. So it looks like all these factors have played a part in the company leaving the largest smartphone market in the world.
While LG thinks it is the right thing to do, the company will basically shift its focus to North American and European markets but again the competition will be tough in these market as Samsung and Apple are already established players and Chinese brands like Huawei and Xiaomi have been gaining traction as well.
Talking about Chinese smartphone manufacturers have been impacting a lot of markets like India which is the world's second-largest smartphone market. However, it will be interesting to see how will cope in the coming days and what other plans as well as strategies it has in place going ahead in 2018.
Meanwhile, the handset maker is expected to launch a new flagship smartphone LG G7 in the market but again the company won't be taking the center stage at MWC this year to do so. Rumors and leaks suggest that it will release an upgraded version of LG V30+ smartphone.
Do you think it is the right decision that LG has made? Or will it face setbacks in the future? Do let us know in the comment section below.