In a press release on Monday, LG Electronics declare that they reorganized their mobile phone division to increase their outsourcing division. This reorganization is done for low to mid-end smartphones that they produce. The aim of this action is of course to compete with their Chinese rivals, and also to cut costs.
LG Electronics Give Up the Manufacture
Their communication business reported several shocking news, that they experienced operating loss for 22 consecutive quarters. This results in the making of new management called ODM or original design manufacture, as delivered by their spokeswoman.
This means, the LG products will handle the manufacture and the design of the smartphones, while LG Electronics will only just put their label on each product. And it is not only the manufacturer, they also reshuffle their production position and its research positions. The spokeswoman says these positions were reshuffled to others’ division. The goal for having more simple management is to focus on their production of high-end smartphones and in-house R and D. While the low-end and mid-end smartphones will be handled by the ODM.
LG might not be number one in the smartphone market globally, they are ranked as number 3 in the global market by Strategy Analytics in the first quarter of 2013. They used to be included in the top seven smartphone brands, but in 2014 they lost from Chinese smartphone companies like Xiaomi, Huawei, Vivo, and also Oppo.
LG Electronics competes with Chinese competitors, they’re not competing with Samsung or Apple. That is why they try to add more value to their lower-end smartphone models. The analyst at Counterpoint also said that LG tries to use the Chinese firms’ original design manufacturers to compete with the Chinese companies.
He also added that marketing ability is needed to compete with the Chinese firms, and though LG Electronics source their own products, without marketing, they won’t make it. LG also said last year, in October that they will expand their ODM to produce more mid-range smartphones from the lower-end smartphone.
The History of LG Electronics
This South Korean multinational electronics firm is based in Seoul, South Korea. The global sale of this company in 2014 reached US$55.91 billion, which makes it one of the fourth-largest corporations in South Korea. LG Electronics run four different business units, includes Mobile Communications, Home Entertainment, Vehicle Components, as well as Air Solutions, and Home Appliances.
This company employs more than 80,000 people with 128 operations worldwide and is known as the world’s second-largest company that manufactures LCD television.
In 2018, LG started to stop their smartphone production in South Korea. They then moved the production to Vietnam to cut costs and to be able to compete with other smartphone manufacturers. The employees will be relocated to the home appliances business site, while the whole laborers who work for their company will be fully from Vietnam.
LG hopes that they can offer maximum solutions and understands their customers well. It is hoped they can help their buyers have better lives with their ceaseless innovation. LG gives new experiences with their products so that the customers achieve a better life. Their slogan also changes several times to meet the modern era. LG says “Life’s Good” and they also believe in “Innovation for a Better Life”.
LG Electronics also helps business owners by providing several services, like Commercial Display for business owners to have stunning digital signage both for outdoor band indoor displays. They also provide IT solutions that bring you various cloud computing and computer monitors service that will increase productivity, security, and daily operations.
Solar panels for residential or business from LG offer reliability, high performance, as well as consistently with more than 20 years of warranty.
LG also provides you residential and commercial air conditioning systems and the residential design industry.
One of the business units in LG is its mobile devices, which includes tablet devices and smartphones. LG released several series of smartphones and one of them is LG G Flex, a curved smartphone in 2013, and the announced in Europe, Asia, and also North America. Their latest smartphone is the G7 ThinQ series that was announced in a media briefing in 2018. This manufacturer also released their tablet computers with several competitive features like LG’s Knock Code that allows you to unlock your device with taps, or the Q Pair feature that will let you sync the table with smartphones. Text messages and phone calls even come up in real-time on your tablet.
And like other smartphone manufacturers, LG Electronics also has its own SmartWatch that was announced in 2014. Their smartwatch brings an Android-based system that became the first smartwatch that had a newer feature like WiFi.