SEOUL (Reuters) – LG Electronics stated on Monday 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 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 abolished some analysis and manufacturing positions and reshuffled others, the spokeswoman stated, as a part of an effort to focus its in-house R&D and manufacturing on premium smartphones, with low and mid-end ones to be produced by ODM.
Though ranked No. 3 in international smartphone market within the first quarter of 2013 by Technique Analytics, LG will not be even among the many prime seven within the third quarter of this yr 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 attempting so as to add to its lower-end fashions’ worth for the worth, by utilizing authentic design producers that Chinese language companies use,” Tom Kang, an analyst at Counterpoint, stated.
“However even when LG sources its merchandise, with out advertising means, it can not win in opposition to Chinese language companies who’re good at it,” Kang added.
LG had stated in October final yr it’s going to develop ODM to its mid-range smartphones line-up from simply low-end smartphones.
Reporting by Joyce Lee; Modifying by Alexander Smith