LG is reforming its mobile division by outsourcing the manufacturing of its low-end and mid-range smartphones. This change would help LG to sustain longer and cut costs as its smartphone business which hasn’t shown growth for almost the last two years.
A report from Reuters suggest that LG will outsource the design and manufacture of its smartphones while keeping the LG branding on the phones intact. LG’s mobile communications business, which has reported an operating loss for 22 consecutive quarters, has created a new management title for original design manufacture (ODM), a spokeswoman for the South Korean company said.
LG will now focus more of its R&D efforts on the premium tier smartphones such as the LG Explorer project devices. LG outsourcing the manufacturing of its low-end devices has been a normal practice for the company since a while. The mid-tier smartphones joined the list in last October while the move furthers ahead today.
Although ranked No. 3 in global smartphone market in the first quarter of 2013 by Strategy Analytics, LG is not even among the top seven in the third quarter of this year after losing ground to Chinese smartphone makers like Huawei, Xiaomi, Oppo and Vivo, research firm Counterpoint says.
Going forward LG will focus on manufacturing only high-end smartphone inhouse