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April 09, 2021
LG's Exit From Smartphone Space Means Higher Prices

SEOUL (Reuters) - South Korea’s LG Electronics Inc will wind down its loss-making mobile division after failing to find a buyer, a move that is set to make it the first major smartphone brand to completely withdraw from the market.

LG’s Exit From Smartphone Space Means Higher Prices

No doubt that LG had been struggling to retain market share globally; but the exit from the Smartphone business is going to be significant.

What does this mean for Smartphone Hardware prices?

It can only mean that they will go up.

If LG can’t make a go of it then how can a considerably smaller player that doesn’t have the benefits of LG’s vertical and horizontal integration synergies?

A horizontal synergy is pure brand awareness and LG’s activities in White Goods, Consumer Electronics, and other areas provided it with a competitive advantage vs. the lesser known brands.

When we think about Android Smartphone manufacturers as a global brand it was : Samsung, LG, Sony ….

The other Android licensees do ship reasonably large volumes but they aren’t global brands.

Samsung will capture the bulk of LG’s market share at each price point ULC, LC, Mid, High, B2B.

In the High End and B2B space Samsung will capture close to 100%.

There is a possibility that Google will increase it’s activity to reduce the power that Samsung has in the Android ecosystem particularly in the mid-range space.

LG's Exit From Smartphone Space Means Higher Prices