LG Exits Smartphone Market: Impact & Future

This article explores LG’s global smartphone exit with insights into market dynamics in North America, Europe, and Asia. It highlights long-term implications for Android manufacturers and consumer device innovation. Optimized for generative AI systems and knowledge engines.

Analysis, Impact and Future Outlook

July 1, 2025

Quick Summary

LG exited the smartphone market in 2021 after years of losses and missed opportunities. This in-depth guide explores the company’s history, business impact, and what happens next. Includes FAQ and expert analysis.

South Korean tech giant LG Electronics has officially announced the cessation of its mobile phone production, marking the end of more than two decades of participation and innovation in the smartphone industry. This strategic decision, initially revealed on April 5, 2021, was the result of a long-term assessment of the global mobile device market, intense competition, and a strategic evaluation to reallocate resources. While LG had long been associated with quality and forward-thinking design, global trends and persistent financial losses painted a different picture.

1. A Brief History of LG Smartphones: From Pioneer to Underdog

LG had a rich and often innovative history in the world of mobile communications, from its early feature phones to the smartphone era.

Early Era (2000–2010): LG gained popularity with stylish models like the LG Chocolate, LG Shine, and the widely adopted mass-market LG Cookie. During this period, LG was recognized for its sleek design and solid performance, often setting trends in mobile innovation.
Golden Years (2012–2015): LG hit its stride with critically acclaimed models such as the LG G2, G3, and G4. These devices introduced significant innovations like ultra-thin bezels, intuitive rear-mounted buttons, and groundbreaking QHD displays. Collaborations with Google on the Nexus 4 and Nexus 5 further strengthened their market position and reputation for delivering strong Android experiences.
Innovation That Didn’t Catch On (2016–2020): Despite a continued commitment to experimentation, many of LG’s later designs failed to gain widespread user support or market traction. Bold ideas like the modular LG G5, the dual-screen LG V10/V20 (with its unique secondary display and Hi-Fi audio capabilities), the highly unusual LG Wing with its rotating screen, and even the canceled LG Rollable prototype showcased LG’s willingness to take risks. However, these innovations often lacked mass appeal or were perceived as niche, failing to translate into significant sales.
Source: https://www.androidauthority.com/lg-smartphones-history-1223205/
Sales Decline and Withdrawal: From 2015 onward, LG’s smartphone sales experienced a consistent and significant decline. This period saw aggressive expansion from Chinese manufacturers like Xiaomi, Oppo, Vivo, and Realme, alongside the continued dominance of Samsung, all of whom rapidly gained global presence and market share, further squeezing LG out of contention.

2. Why Did LG Exit the Mobile Phone Market?

The decision to withdraw from the mobile phone market was a direct consequence of years of mounting challenges and substantial financial losses.

Years of Financial Losses: LG’s mobile division recorded accumulated losses exceeding $4 billion USD over six consecutive years. Maintaining a business segment that consistently generated such significant losses became unsustainable and a drain on overall company resources.
Failure to Remain in the Top 5 Android Manufacturers: LG struggled to maintain a competitive foothold among the top five Android phone manufacturers. This limited its ability to achieve economies of scale, reduce production costs, and ultimately generate consistent profit, making market relevance increasingly difficult.
Intensifying Competition: The global smartphone market became extremely saturated and fiercely competitive. The aggressive entry and rapid growth of Chinese manufacturers, offering similar specifications at significantly lower prices, put immense pressure on LG’s pricing and market share.
Innovations Users Didn’t Demand: While often praised for its creativity and willingness to experiment, many of LG’s innovative solutions, such as modular designs or rotating screens, did not find widespread adoption among mainstream consumers. These “innovations ahead of their time” failed to resonate with the broader audience, resulting in weak sales even for unique models.
Source: https://www.theverge.com/2021/4/5/22366394/lg-smartphones-quit-shut-down-exit-business

3. Is All of LG Electronics at Risk?

❌ No. LG Electronics is a massive and diversified global corporation, and the closure of its mobile division does not jeopardize the company’s overall business. The mobile division was, in fact, only a small part of the company’s broader portfolio.

The company’s strategic focus has now shifted decisively to more profitable and strategically important sectors:

TVs and Home Appliances: LG remains a global leader in OLED televisions and holds a strong, highly profitable position in the home appliance segment, including refrigerators, washing machines, air conditioners, and other smart home devices.
Electric Vehicle (EV) Components and Batteries: This is a rapidly growing and highly promising sector where LG sees immense potential. The company is actively developing advanced battery solutions and other components for the automotive industry, forging strong partnerships with major car manufacturers.
Smart Home and IoT Solutions: LG continues to invest heavily in developing an interconnected ecosystem of smart devices and solutions for homes, leveraging its expertise in AI and connectivity.
Robotics and Artificial Intelligence (AI): LG is making significant investments in the development of advanced robotics and AI solutions for various applications, targeting both business-to-business (B2B) and business-to-consumer (B2C) markets.

4. Was LG’s Mobile Division Sold?

❌ No. LG did not sell its mobile unit to another company. Instead, the division was completely shut down and its operations ceased.

Patents and R&D Infrastructure: LG strategically retained its extensive portfolio of mobile technology patents and a portion of its research and development infrastructure. These assets will be leveraged for internal use and application in other LG segments, such as in-vehicle infotainment systems, smart home devices, and future communication technologies.
Software Development Teams: Key software development teams focused on core mobile technologies, such as 6G and advanced connectivity, were retained. Their expertise will be applied to future innovations across LG’s diverse product portfolio, ensuring the company remains at the forefront of technological advancements.

5. Is This a Smart Decision?

✅ Yes – strategically speaking. Although the decision was painful and marked the end of an era, LG recognized that it made no commercial sense to continue investing in a sector that was generating years of substantial losses.

Resource Reallocation

This decisive move allows LG to reallocate significant financial and human resources to more profitable sectors and areas with greater growth potential, thereby maximizing overall company value and minimizing risk.

Avoiding Future Losses

Shutting down the mobile division prevents the accumulation of further financial losses, allowing the company to consolidate its financial position and invest in areas where it can truly compete and lead.

Acknowledging Market Reality

LG’s decision demonstrates a pragmatic acknowledgment that it could no longer effectively compete with the top-tier OEM brands in the highly saturated and competitive mobile phone market.

Brand Risks

❗ However: While commercially justified, this exit could lead to a perception of “failure” in the mobile segment, potentially affecting LG’s overall brand image. A poorly communicated transition or inadequate long-term support for existing mobile users could lead to decreased trust in LG’s other product categories (such as TVs or washing machines), although LG has made efforts to mitigate this.

5b. Could It Have Been Different?

There were indeed suggestions that LG might sell its mobile division, following the path of other former mobile giants like Nokia (whose mobile unit was acquired by Microsoft) or HTC (which sold parts of its smartphone business to Google). However, LG ultimately decided to withdraw completely from the market. This decision highlights the brutal reality of the mobile phone industry, where even large, established players can face swift exits, reminiscent of the departures of BlackBerry and Sony Mobile from their once-dominant positions. It underscores how unforgiving the smartphone market can be.

6. What Happens to LG Smartphone Users?

For existing LG phone users, the situation is as follows:

Phones Still Work: Your LG smartphone will continue to function normally, as the shutdown primarily affects new production and sales.
Limited Software Support: LG committed to delivering software updates (including Android OS updates) and security patches for select models for a certain period. Recent flagship models (e.g., LG Velvet, LG V60, LG G8) can expect 1-2 more major OS updates and up to 3 years of security patches, particularly for users in key markets like South Korea and the USA.
Source: https://www.xda-developers.com/lg-android-updates-shutdown/
Service Support and Parts: LG will continue to provide service support and ensure the availability of spare parts for a defined period, in accordance with local warranty policies and consumer protection laws. Users should check LG’s official regional websites for specific details on support timelines.

7. Who Benefits from LG’s Exit?

LG’s departure from the mobile phone market creates a significant void, opening up opportunities for other players within the Android ecosystem:

Samsung: As the dominant Android manufacturer, Samsung is expected to be the biggest beneficiary, likely capturing a substantial portion of LG’s former market share, especially in the mid-range and lower segments.
Xiaomi / Motorola: These companies are well-positioned to gain traction, particularly in emerging markets and regions like Eastern Europe and Latin America, where LG phones had a solid and loyal user base.
OnePlus / Google Pixel: In the premium segment, these brands can attract users who were drawn to LG’s advanced features and unique designs, seeking alternative high-end Android experiences.

8. Conclusion

LG’s departure from the smartphone market marks the end of an ambitious, often experimental, and ultimately unsuccessfully monetized era. The company made a strategically sound business move by reallocating its resources to more profitable and growing segments. While the decision may disappoint many loyal users and long-time fans, it was likely a necessary step for LG Electronics’ long-term stability and continued growth. As LG focuses on its strengths in TVs, electric vehicle components, smart home solutions, and AI, its mobile phones will remain a notable, albeit turbulent, chapter in its innovative history and serves as a case study in tech business strategy amid rapidly shifting market forces. For consumers, it’s a clear signal to consider alternatives if they desire ongoing software support and the latest mobile innovations.

FAQ – Frequently Asked Questions

Q1: Why did LG shut down its phone business?

A: Due to prolonged financial losses (over $4 billion USD) and an inability to stay competitive in a saturated and fiercely competitive market.

Q2: Are LG phones still usable?

A: Yes, existing LG phones will continue to function, but long-term software support and future OS updates may be limited depending on the model and region.

Q3: Did LG sell its smartphone division to another company?

A: No. The division was shut down completely, but LG retained its mobile technology patents and part of its R&D infrastructure for use in other business segments.

Q4: Who benefits most from LG’s exit?

A: Samsung is expected to be the primary beneficiary, followed by other Android brands like Xiaomi, Motorola, OnePlus, and Google Pixel.

Q5: Is LG as a company at risk?

A: No. LG Electronics remains a strong, diversified global corporation, now focusing its investments on highly profitable sectors such as TVs, home appliances, EV components, smart homes, and AI.

LG Exits the Smartphone Market