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| LG uses external resources to manufacture mobile phones |
LG Electronics said Monday that it is restructuring its wireless division to intensify the outsourcing of low-cost smartphones.
The company is fixing the weak wireless industry to stay competitive.
Analysts pointed out that LG's new initiative is an attempt to cut costs and compete with Chinese competitors as the company has struggled to adapt to the market in recent years.
LG said: The mobile phone industry suffered losses for 22 consecutive quarters and decided to partner with outside resources to design and manufacture LG-branded smartphones.
LG is committed to reducing development costs and remaining competitive as competition intensifies in the most affordable areas of the smartphone market.
The company has also cut some research and manufacturing positions and reassigned others to focus R&D in-house on high-end smartphones while outside sources produce mid and low end devices.
According to market research firm Strategy Analytics, the company ranked third in the global smartphone market in the first quarter of 2013.
After market research firm Counterpoint lost its place with Chinese manufacturers such as Huawei, Xiaomi, Vivo and Oppo, it ranked seventh in the third quarter of this year.
Tom Kang, an analyst at Counterpoint, the market research firm, said, "He knows he's likely to compete with more Chinese competitors than Apple or Samsung."
“LG has tried to lower the price of its models by working with outside manufacturers from Chinese companies, but without marketing skills, LG cannot compete even by using outside resources to make products,” he added. Chinese company.
In October last year, LG announced the expansion of its cooperation with external resources to expand the range of mid-range smartphones. This is the most competitive field. Previously, the collaboration involved only low-end smartphones of the range.
Transformational features will appear in the company's business model starting in 2020 as most of its flagship phones no longer use Qualcomm's flagship processors and the company focuses on designs like the LG Velvet or similar appearances to the LG Wing.