By Kwanwoo Jun

LG Electronics Inc. will shut down its unprofitable smartphone business after years of struggling to compete with industry leaders Apple Inc. and Samsung Electronics Co. as well as fast-growing Chinese rivals.

The South Korean consumer-electronics giant said in a regulatory filing Monday that its board of directors unanimously decided to stop producing and selling smartphones July 31.

The smartphone segment of LG Electronics has been in the red since the second quarter of 2015, with its accumulated operating loss totaling more than 5 trillion won ($4.43 billion).

LG Electronics said it expects its exit from the smartphone business to reduce the company's overall revenue in the short term but improve its business and financing health in the long run.

The global smartphone market has been increasingly mature and competitive for LG Electronics.

Chinese smartphone brands--including Huawei Technologies Co., Xiaomi Corp., Vivo and Oppo--accounted for a record 57% combined market share in 2020, according to Strategy Analytics, a market researcher.

LG Electronics shares rose 3.9% after the company announced its decision to pull out of the smartphone business.

Write to Kwanwoo Jun at kwanwoo.jun@wsj.com

(END) Dow Jones Newswires

04-04-21 2250ET