LG's Android Phone Division Exits China Amid Heavy Losses

LG Logo 2017 AH 4

LG Electronics is giving up on the Chinese Android smartphone market amid heavy losses, having opted to officially exit the Far Eastern country, local media reports. The Seoul-based original equipment manufacturer hasn’t launched a new handset in China since the LG G5 SE in mid-2016 but was still selling select models until recently, though its local smartphone unit is now set to cease all operations in the coming weeks. The firm cited increasingly tougher competition as the main reason for its decision, with recent estimates placing its share of the Chinese smartphone market at well under a single percentage point. All other divisions of the tech giant operating in the country will continue doing so going forward as they’re still understood to be healthy in spite of the rising tensions between Seoul and Beijing that heavily impacted Korean companies doing business in China over the last several years.

LG’s mobile business as a whole has been struggling in recent times, losing over a billion dollars in the last three years alone. While most other divisions of the company are widely successful and are presently propelling it to new performance records, its smartphone unit continues bleeding money, having ended up the fourth quarter of 2017 more than $200 million in the red. The issues in the segment prompted LG to reorganize some of its mobile operations in recent quarters, in addition to opting for multiple cost-cutting efforts, including the one that now happened in China. The company also dropped its product strategy of introducing sequels to its Android flagships after an arbitrary 12-month mark only because its competitors do the same and is now seeking to keep its products updated for longer, both in terms of software support and minor hardware revisions.

One such revamp of the LG V30 Plus is expected to debut late this month at the 2018 iteration of the Mobile World Congress in Barcelona, Spain, whereas the successor to the G6 is unlikely to be launched until mid-2018. Samsung is another Korean Android OEM that’s been losing a lot of business in China in recent years but is showing no indication of being willing to drop that market as it’s still making a profit. Regardless, Samsung’s local share dropped by over 90-percent over the last half a decade and currently amounts to only around two percentage points of the Chinese market, according to multiple industry trackers.