LG to outsource budget phone production and shift focus to flagships

guest · Dec 8, 2020

LG to outsource budget phone production and shift focus to flagships
December 8, 2020
https://www.xda-developers.com/lg-outsource-budget-phone-production-shift-focus-flagships/

In an attempt to bring its struggling smartphone business back on track, LG started 2020 with a new strategy. As detailed in LG’s 2019 financial report, this strategy aimed to shift focus from premium flagships, like the LG G-series, to “mass-premium and mass-tier 5G products,” like the LG Velvet.

The report also revealed that the company planned on improving cost competitiveness by “proactively utilizing ODMs in mass-tier products.” But while LG has already realized the shift to mass-premium and mass-tier 5G devices this year, the company is yet to ramp up outsourcing of mass-tier products. However, that might change soon.
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According to a recent report from Reuters, LG is now planning to increase outsourcing of its low to mid-range smartphones to cut costs and compete with Chinese rivals.
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Reuters: LG shakes up loss-making phone business, to outsource lower-end models

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.

“It knows it is competing with Chinese competitors, not Apple or Samsung, and it is trying to add to its lower-end models’ value for the price, by using original design manufacturers that Chinese firms use,” Tom Kang, an analyst at Counterpoint, said.
“But even if LG sources its products, without marketing ability, it cannot win against Chinese firms who are good at it,” Kang added.
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