The South Korean technology group LG Electronics is discontinuing the production of smartphones.

The company points to the fierce competition in the mobile phone market and to the fact that it is making ongoing losses on these activities.

With the move, LG is the first major brand to completely disappear from the smartphone market.

Production will stop as of July 31.

LG was one of the pioneers with smartphones running Google's Android operating system, with the popular LG Nexus model.

The company once had a large market share in the United States, but has lost that to rivals such as Apple and the South Korean Samsung Electronics.

LG also faced fierce competition from Chinese manufacturers such as Huawei Technologies and Xiaomi in other markets.

The Koreans said in January that it is looking at options for the smartphone division that has been loss-making for years.

Talks were reportedly held with a Vietnamese company about a sale of the telephone business, but they were broken by differences of opinion about the value of technology patents, according to local media.

The group is now going to focus more on components for electric cars, for example.

In this field, a collaboration has already been entered into with the Canadian Magna International.

Investors have speculated that this partnership could contribute to an Apple electric car.

It would be the first time that a well-known smartphone brand will disappear completely from the market.

Well-known brands such as HTC, Nokia and BlackBerry have also virtually disappeared, but are still being sold in small numbers.

The global market share of LG's smartphones is estimated at only 2 percent.

According to market researchers, the company shipped 23 million mobile phones last year, against 256 million smartphones by Samsung.