LG Electronics to end production, sales of its loss-making smartphone biz

 The division is the smallest of LG's five divisions, accounting for just 7.4% of revenue in the fourth quarter

South Korea's LG Electronics Inc said on Monday it will wind down its loss-making mobile division - a move that is set to make it the first major smartphone brand to completely withdraw from the market.

Its decision to pull out will leave its 10% share in North America, where it is the No. 3 brands, to be gobbled up by smartphone titans Apple Inc and Samsung Electronics.

The division has logged nearly six years of losses totalling some $4.5 billion, and dropping out of the fiercely competitive sector would allow LG to focus on growth areas such as electric vehicle components, connected devices, and smart homes, it said in a statement.

In better times, LG was early to market with a number of cell phone innovations including ultra-wide-angle cameras, and was once in 2013 the world's third-largest smartphone manufacturer behind Samsung and Apple.

But later, its flagship models suffered from both software and hardware mishaps which combined with slower software updates saw the brand steadily slip in favor. Analysts have also criticized the company for its lack of expertise in marketing compared to Chinese rivals.

Currently, its global share is only about 2%. It shipped 23 million phones last year which compares with 256 million for Samsung, according to research provider Counterpoint.

In addition to North America, it does have a sizeable presence in Latin America, where it ranks as the No. 5 brands.

"In South America, Samsung and Chinese companies such as Oppo, Vivo, and Xiaomi are expected to benefit in the low to mid-end segment," said Park Sung-soon, an analyst at Cape Investment & Securities.