LG ups outsourcing drive to revive devices division - Mobile World Live

LG ups outsourcing drive to revive devices division

07 DEC 2020

LG Electronics restructured its ailing mobile communications division in an apparent attempt to cut costs, Reuters reported, with measures including an increase in outsourcing of design and manufacture for mid- and lower-tier devices.

Quoting a manufacturer representative, the news publication added the company had changed around its R&D and production facilities with the aim of focusing its in-house efforts on its premium line.

Although showing sequential and year-on-year improvements in Q3, the company continues to lose money from its mobile communications segment: operating loss in the quarter was KRW148 billion ($136.1 million).

In January the company warned it expected the unit to suffer from “severe competition” in selling 5G handsets, noting the success of the division hinged on its ability to sell mid- to high-tier devices to the mass market.

Later in the year, it warned pandemic-related production issues would further hamper progress.

Although launching a spate of mid- and lower-tier devices in 2020, it has also attempted to differentiate its offering in the premium segment through the LG Wing from its Explorer Project segment, a unit charged with bringing high-end devices with original form factors to market.

Prior to the latest move, LG already outsourced a number of elements for its branded devices at the value end of the market.

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Chris Donkin

Chris joined the Mobile World Live team in November 2016 having previously worked at a number of UK media outlets including Trinity Mirror, The Press Association and UK telecoms publication Mobile News. After spending 10 years in journalism, he moved...

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