LG Stop smartphone manufacturing


The news that LG is set to stop smartphone manufacturing in South Korea is not surprising to those in the mobile world. The South Korean firm has been struggling a lot in the market. The competition is high and selling or out selling you competitors is key to surviving in this space.

LG has been struggling in the smartphone market for quite some time. A couple of months ago, the company quit the Chinese smartphone market because it couldn’t keep up with the intense competition in China. Now, according to Yonhap News Agency, LG will halt the manufacturing of smartphones in its home country, South Korea and will move the manufacturing to its plant in Vietnam.

Reason For LG to Stop Smartphone manufacturing

According Reuters the Korean phone maker needs to cut down production costs which makes it very important for its manufacturing plant to move out of South Korea. Although this information has not been officially verified, it is not surprising that LG is taking this step. For several quarters, LG has consistently posted losses in its smartphone business. It can compete with the likes of Apple and Samsung in the high-end market. The likes of Xiaomi and Huawei has a strong grip on the mid-range market while the low-end market is dominated by numerous Chinese OEMs.

LG Stop smartphone manufacturing

It has production bases for smartphones in South Korea, China, Vietnam, Brazil and India, and the South Korean factory mainly manufactures high-end models, accounting for 10 percent to 20 percent of the firm’s total smartphone output.

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What’s the way forward for LG?

LG will have to redrew their market plans. They have to consider certain market where the competition doesn’t favor LG. The company will also have to consider producing more low end device. Brands like Nokia Techno have found successes in such markets.

Source : Reuters

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