LG stops selling smartphones and jumps on the hype of electric vehicles

Story in Brief:

LG Electronics, a South-Korean electronics business, has announced plans to cease its smartphone business, due to facing increasing competition by other smartphone competitors. According to the BBC, the company has experienced six years of loss-making, equalling an estimated amount of $4.5b. 

Key Takeaways:

Despite LG’s innovative creations including its ‘ultra-wide-angle cameras’ to distinguish its products from rivals, the company has still struggled to stay competitive with the likes of Samsung and Apple (BBC). Despite attempting to stay afloat by previously holding discussions to sell proportions of its business, the company has decided to completely exit the smartphone market, pursuing all efforts to focus upon other core areas. According to the company, such areas include “electric vehicles, connected devices, smart homes, robotics and artificial intelligence” (BBC). 

Interview Essentials:

Firstly, consider the reason that LG has decided to stop producing smartphones – the increasing competition. Should the likes of Apple and Samsung’s growth be curbed to prevent other smartphone companies from halting their operations? Next, consider the positive implications this will provide to Chinese smartphone groups including Huawei, Xiaomi and Oppo – will these companies benefit from reduced competition and a larger market share? Recently, Xiaomi also revealed its plans to invest $10b in electric vehicles (EVs) – consider the reasons why two smartphone manufacturers are extremely eager to join the EV race?

To find out more:

https://www.ft.com/content/cbd36a87-fb4f-42f2-b116-5fbb2063f3f9
https://www.bbc.co.uk/news/business-56635888

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