Not for the first time, a big global tech name is bowing out of the cutthroat smartphone business -- Korean electronics giant LG. The company said in a press release that it is shuttering its mobile phone business unit, a decision approved by its board of directors.

LG has never been a particularly important player in the global market for such devices. It faced stiff competition not only from the durably popular Apple (AAPL 0.02%) iPhone but also from appealing models produced by powerful regional manufacturers such as Samsung and Xiaomi

Man using cell phone.

Image source: Getty Images.

According to data compiled by Statista, LG had crept above 5% of total worldwide smartphone shipments only one quarter (the third quarter of 2015) from the beginning of 2015 to the end of 2020. In the fourth quarter of last year, the vendor's share was an anemic 2%. At that point, Apple had 21% and Samsung was nipping at its heels with 16%.

In a press release, LG said its "strategic decision to exit the incredibly competitive mobile phone sector will enable the company to focus resources in growth areas such as electric vehicle components, connected devices, smart homes, robotics, artificial intelligence and business-to-business solutions, as well as platforms and services."

The company added that it will continue to push out software updates for its phones and provide service support. It will do so for various lengths of time, depending on the region. 

LG said that its winddown of the phone segment should be completed by July 31.

The company is actually understating the case; while there is much potential in 5G, legacy smartphones have quickly reached near saturation in many markets around the world. Due to the still-high number of manufacturers, it has become extremely difficult for fringe players to earn a meaningful profit in the segment.