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LG Rejigs Loss-Making Phone Business, To Outsource Lower-end Models

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LG Rejigs Loss-Making Phone Business, To Outsource Lower-end Models

LG had stated in October final yr it is going to increase ODM to its mid-range smartphones line-up.

LG Electronics on Monday stated it had reorganised its cell phone division to extend outsourcing of its low to mid-end smartphones, which analysts stated represented an try to chop prices and compete with Chinese rivals.

LG’s cell communications enterprise, which has reported an working loss for 22 consecutive quarters, has created a brand new administration title for authentic design manufacture (ODM), a spokeswoman for the South Korean firm stated.

This refers back to the outsourcing of design and manufacture of smartphones, with LG placing its label on the product.

It has additionally lower some analysis and manufacturing positions and reshuffled others, the spokeswoman stated, as a part of an effort to focus its in-house analysis and growth R&D and manufacturing on premium smartphones, with low and mid-end ones to be produced by ODM.

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Although ranked No. three in world smartphone market within the first quarter of 2013 by Strategy Analytics, LG isn’t even among the many high seven within the third quarter of this yr after dropping floor to Chinese smartphone makers like Huawei, Xiaomi, Oppo and Vivo, analysis agency Counterpoint says.

“It knows it is competing with Chinese competitors, not Apple or Samsung, and it is trying to add to its lower-end models’ value for the price, by using original design manufacturers that Chinese firms use,” Tom Kang, an analyst at Counterpoint, stated.

“But even if LG sources its products, without marketing ability, it cannot win against Chinese firms who are good at it,” Kang added.

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