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

LG had stated in October final 12 months it would develop 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 language rivals.

LG’s cellular communications enterprise, which has reported an working loss for 22 consecutive quarters, has created a brand new administration title for unique 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 reduce some analysis and manufacturing positions and reshuffled others, the spokeswoman stated, as a part of an effort to focus its in-house analysis and improvement R&D and manufacturing on premium smartphones, with low and mid-end ones to be produced by ODM.

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Though ranked No. three in international smartphone market within the first quarter of 2013 by Technique Analytics, LG isn’t even among the many prime seven within the third quarter of this 12 months after shedding floor to Chinese language smartphone makers like Huawei, Xiaomi, Oppo and Vivo, analysis agency Counterpoint says.

“It is aware of it’s competing with Chinese language rivals, not Apple or Samsung, and it’s making an attempt so as to add to its lower-end fashions’ worth for the worth, through the use of unique design producers that Chinese language companies use,” Tom Kang, an analyst at Counterpoint, stated.

“However even when LG sources its merchandise, with out advertising and marketing skill, it can’t win towards Chinese language companies who’re good at it,” Kang added.

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