South Korean electronic giant, LG Electronics Inc, has said that it will be closing down its loss-making mobile division after failing to find a buyer.
This move by LG is set to make it the first major smartphone brand to completely withdraw from the market.
According to a report from Reuters, this disclosure is contained in a statement issued by LG on Monday in Seoul.
LG had said that its smartphone division has recorded total losses of about $4.5 billion in almost 6 years adding that shutting down that division would allow LG to focus on growth areas like electric vehicle components, connected devices, and smart homes.
The decision by LG, to shut down its mobile division will leave its 10% share in North America, where it is the Number 3 brand, to be quickly taken up by Samsung Electronics and Apple Inc with its domestic rival expected to have the edge.
An analyst at Hi Investment and Securities, Ko Eui-Young, said, “In the United States, LG has targeted mid-priced – if not ultra-low – models and that means Samsung, which has more mid-priced product lines than Apple, will be better able to attract LG users.’’
LG, the world’s third-largest smartphone manufacturer behind Samsung and Apple, entered the market quite early with a number of cell phone innovations like ultra-wide-angle cameras and so on.
However, its setback started with its flagship models suffering from both software and hardware mishaps. This, combined with slower software updates saw the brand steadily going out of favour. Analysts have also criticized the company for its lack of expertise in marketing compared to its Chinese rivals.
Although other well-known mobile brands such as Nokia, HTC, and Blackberry are all going through a rough patch as they have fallen from lofty heights, they have yet to disappear completely.
LG’s smartphone division, the smallest of its five divisions accounting for about 7% of revenue, is expected to be wound down by July 31. In South Korea, the division’s employees are expected to be integrated into other LG Electronics businesses and affiliates, while in other countries, the employment decisions will be made at the local level.
LG Electronics shares have risen about 7% since a January announcement that it was considering all options for the business.
What this means
- LG’s withdrawal from the smartphone business had been on the horizon for some years now due to losses recorded by that division.
- The firm which was once considered a pioneer of the Andriod operating system had struggled for increased sales in the face of stiff competition from the likes of Huawei. The closing down of the division will allow the smartphone company to concentrate on their more profitable divisions.
President Buhari restores ownership of OML 123, 124, 126 and 137 to NNPC
The President has ordered the restoration of ownership of OML 123, others to NNPC.
President Muhammadu Buhari has approved the restoration of the leases on OMLs 123, 124, 126 and 137 to the Nigeria National Petroleum Corporation (NNPC) which is in a production sharing contract with the Chinese government-0wned, Addax Petroleum.
This is in line with the current administration’s rule of law, fairness and enabling a stable business environment for businesses.
This disclosure is contained in a statement issued by the Senior Special Assistant to the President on Media and Publicity, Garba Shehu, through a series of tweet posts on his official Twitter handle on Friday, April 23, 2021.
The President directed the Department of Petroleum Resources (DPR) to retract the letter of revocation of the leases, while also directing NNPC to utilize contractual provisions to resolve issues in line with extant provisions of the Production Sharing Contract arrangement between NNPC and Addax.
What the Presidential Media Aide is saying in the statement
The statement from Garba Shehu partly reads, ‘’In line with the current administration’s commitment to the rule of law, fairness and enabling a stable business climate for investment, President Muhammadu Buhari has approved the restoration of the leases on OMLs 123, 124, 126 and 137 to NNPC Group which is in production sharing contract with Addax Petroleum, a company wholly owned by Government of the People’s Republic of China on the blocks. The leases belonging to the Federation were revoked on March 30, 2021.
‘’This development reaffirms the commitment of President Buhari to the rule of law and sanctity of contracts. While directing the Department of Petroleum Resources, DPR to retract the letter pf revocation of the leases, the President also directed NNPC to utilize contractual provisions to resolve issues in line with the extant provisions of the Production Sharing Contract arrangement between NNPC and Addax.’’
Shehu in his statement also said that the restoration of the blocks to NNPC will boost the organisation’s portfolio, thereby making the corporation to, in the long run, boost its crude oil production and in turn increase the revenue it generates to the Federation Account
In line with the current administration’s commitment to the rule of law, fairness & enabling a stable business climate for investment, President @MBuhari has approved the restoration of the leases on OMLs 123, 124, 126 & 137 to @NNPCgroup,…
— Garba Shehu (@GarShehu) April 23, 2021
Dangote acquires 400 trucks from ANAMMCO plant in Enugu, brings total to 4,000
Dangote Group has taken delivery of another set of 400 Shacman trucks from Transit Support Services Limited and assembled in the former ANAMMCO plant in Enugu.
The Dangote Group has taken delivery of another set of 400 Shacman trucks from Transit Support Services Limited and assembled in the former ANAMMCO plant in Enugu.
This brings the total number of trucks bought by the Dangote Group from Transit Support Services Limited to about 4,000 units since the entry of the brand into the country in 2016.
According to a report from the Punch, this disclosure is contained in a statement issued by the Head of Public Relations and Media at the Transit Support Services Limited, Iyere Ikhide.
Ikhide in the statement said that the Dangote-Shacman partnership has led to the resuscitation of the ANAMMCO plant in Enugu.
It described Dangote as the biggest customer of the Enugu-based auto assembler, noting that the partnership had resulted in the provision of more jobs for many youths; rejuvenation of the Onne Port in Rivers State and the attendant economic benefits.
The statement from Transit Support Services Limited partly reads, “Following the partnership deal and commitments to quality, the biggest customer of Shacman brand in Nigeria, Dangote Group, has taken delivery of additional 400 units of Shacman trucks.
Dangote Group has since the entrance of Shacman vehicles into the Nigerian market through Transit Support Services Limited as Shacman Nigeria six years ago, bought over 3,500 units of the brand.’’
What you should know
- It can be recalled that in February 2020, the largest Indigenous Industrial Conglomerate in West Africa, the Dangote Group, invested about N63 billion in a local automaker with an assembling plant in Enugu with the purchase of 3,500 trucks while going into a long-term partnership with them.
- The automaker, which goes by the name Transit Support Services Limited, went into a long-term agreement with Dangote Group and has already supplied 3,500 Shacman trucks to the company from its Anambra Motor Manufacturing Company assembly plant in Emene Enugu State.
Nairametrics | Company Earnings
Access our Live Feed portal for the latest company earnings as they drop.
- Stanbic IBTC profit plunges by over 45% to N11.3 billion in Q1 2021.
- Nigerian Breweries Plc grows profit by 39% to N7.7 billion in Q1 2021.
- Trans Nationwide Express Plc profit after tax slumps by over 95% in Q1 2021
- FCMB approves FY 2020 dividend pay-out of N2.97 billion to shareholders.
- Africa Prudential Plc posts profit after tax of N381.35 million in Q1 2021.