LG out-sourcing some phones after losing money for 5+ years

Chris Burns - Dec 7, 2020, 11:00am CST
LG out-sourcing some phones after losing money for 5+ years

This week LG announced that they’d be reorganizing a bit of their mobile phone business, at long last. They’ll be increasing outsourcing of designs for low end and mid-end smartphones, according to a spokesperson for LG. This would create a model similar to that of several major players in the smartphone market, particularly those speedily growing brands that’ve expanded beyond China over the past half-decade.

Speaking today with Reuters, an LG spokesperson suggested that LG’s done a bit of a reshuffle of resources. As part of an effort to “focus its in-house R&D and production on premium smartphones”, the company’s ended some R&D positions entirely, and moved around others.

In effect, the biggest and most expensive LG phones will continue to be designed and manufactured by LG, while the rest will be outsourced. That means designers and manufacturers outside of LG will take command of the creation process, while LG’s brand remains in play. For most LG smartphone consumers, this change won’t seem like much of a difference. It might even seem like an improvement, as 3rd-party designers and manufacturers may jump at the chance to make something at least as good as what LG’s made in the recent past.

This outsourcing makes sense from a marketing position, at the very least. Per LG’s own earnings reports, the company’s mobile division has run with an operating loss for the past 22 quarters – that’s 22 consecutive quarters with an operating loss. Can you imagine any other business allowing a segment of their operation losing money for 5 and a half years without fail?

When’s the last time you purchased an LG smartphone? If you did, was it a high-end phone, or a burner? Have you purchased an LG G smartphone in the past – and do you regret that decision now? Let us know!


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