LG Electronics is leaving the “incredibly competitive” mobile phone market after it announced on Monday that its smartphone business will close by the summer.

The South Korean electronics giant said that a “strategic decision” was made following extensive losses and a desire to focus on growth areas such as other connected devices and artificial intelligence.

LG was the third biggest smartphone maker eight years ago, but it has struggled to make the division profitable and has posted losses of around £3.3bn since 2015.

Its smartphone sales are also dwindling with 28m units shipped last year, which equates to just a 2% share of the global mobile phone market.

South Korean rival Samsung shipped 256m devices in 2020 and has an 18% market share.

LG is now planning to shutter its mobile phone division, which currently accounts for 7.4% of its overall revenue, by the end of July.

The company said that users with LG phones will still be able to get software updates and support after that date, though it will vary by region.

Analysts believe that a number of Chinese companies, including Xiaomi and Oppo, could benefit in the mid-range mobile phone segment following LG’s departure.

LG will now focus its efforts in other more lucrative areas such as TVs, where it is second only to Samsung globally, though it will still tap into its mobile capabilities elsewhere.

“Moving forward, LG will continue to leverage its mobile expertise and develop mobility-related technologies such as 6G to help further strengthen competitiveness in other business areas,” LG said in a statement.