LG shakes up loss-making phone business, to outsource lower-end models

SEOUL (Reuters) – LG Electronics said on Monday it had reorganised its mobile phone division to increase outsourcing of its low to mid-end smartphones, which analysts said represented an attempt to cut costs and compete with Chinese rivals.

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.

This refers to the outsourcing of design and manufacture of smartphones, with LG putting its label on the product.

It has also abolished some research and production positions and reshuffled others, the spokeswoman said, as part of an effort to focus its in-house R&D and production on premium smartphones, with low and mid-end ones to be produced by ODM.