LG is experiencing major adjustments

Absrtact: LG, the world's third-largest handset maker, is also facing major adjustments following the implosion of the Nokia Symbian System Research and Development Division. In the context of the deteriorating business of LG's mobile phone (microblog), the move was artificially shrinking in China. Not long ago, Nokia (Weibo

LG, the world's third-largest handset maker, is also facing major adjustments following the explosion of layoffs at Nokia's Symbian System Research and Development Division. In the context of the deteriorating business of LG's mobile phone (microblog), the move was artificially shrinking in China.

Not long ago, Nokia (Weibo) only just cut 170 of Symbian system development and service staff, Motorola (micro-blog) Mobile was also acquired by Google. Coupled with the strategic adjustment of LG Electronics, the recent 3 companies have made a large-scale mobile phone business adjustment. Nokia's market capitalisation shrank 2/3 after Apple launched its iphone in 2007, with Motorola's mobile-phone losses stubbornly high and LG's handset business running for 5 consecutive quarters, the 3 companies said. The 3 companies in the mobile phone business when the state of exhaustion, all of the time to display the mobile phone "slimming surgery."

Yesterday (September 5), The daily economic news reporter from within the LG China learned that the LG Electronics China Research and Development Center mobile Phone Research and Development department will be a wide range of adjustments. LG Electronics, an unnamed employee told the Daily economic news reporter, LG Friday will officially release this news, the adjustment, mobile phone research and development Department of 150 employees or will only leave less than 10 into Yantai production plant, the original Beijing Research and Development Center mobile Phone Research and Development department will also be canceled.

Subsequently, the daily economic news reporter from LG's official reply confirmed the news of the strategic adjustment. As for the number of people involved, LG said that the current internal is doing the relevant number of statistics, temporarily inconvenient external disclosure. LG said that the adjustment is from the operational efficiency of the Organization from the point of view of personnel reconfiguration, hope that through the above measures to minimize the turnover of staff.

Beijing mobile Phone Research and Development department will be merged

According to the above LG internal staff revealed that in Friday, about 10 colleagues due to the company's Labor Department's "no longer renewed" mail notification. Before that, the research department had a maximum of 2 months without a project to do.

LG employees said that although no formal notice has been received, but there has been rumors inside the Beijing mobile phone research and development department can only leave less than 10 people, the main personnel for the planning department and individual executives, these people will be transferred to the Yantai Research and Development center, and the rest of the staff is included in the scope of LG is said to have awarded the "N" compensation scheme.

In response to the above news, LG said in a written reply to the daily economic news, "in the past, LG Handset Research and Development department in Beijing, the production plant in Shandong (Yantai, Qingdao)." Recently, the company hopes to merge the production and development of mobile phones into one organization in order to improve the coordination and efficiency of two departments. ”

LG pointed out that, once implemented, the current Beijing mobile phone research and Development department may be merged into the Yantai plant. For the current Beijing mobile phone research and development team members, if I request to the Yantai factory or South Korea headquarters, LG according to the specific circumstances as far as possible arrangements, if you want to stay in Beijing Research and Development Center, LG will try to arrange to Beijing LCD TV research and development department.

"Localization strategy" adjustment?

LG Electronic entered China, has been emphasizing its "localization strategy", as LG in China, an important component of its mobile phone research and Development Center, the merger of the industry is considered to be in mobile phone product sales under the localization strategy adjustment.

LG Electronics localization strategy is not pragmatic, the company has 20 years in Qingdao, Yantai, Huizhou and other land set up a total of 13 production base, and in China set up a number of technology research and Development Center and Design Center, the incident in Beijing mobile phone research and Development center is one of them.

However, over the years, LG Electronic business in China has repeatedly been criticized by the industry as "paternalistic management", because planning, research and development, marketing and other aspects of the important decision-making power always in the hands of LG Korea headquarters. Industry analysts believe that, because the headquarters away from the Chinese market, its decision-making process is slow, and the gap between the market situation is larger, leading to LG electronics business in China difficult to pick up.

LG Electronics, the world's third-largest handset maker, has been the world's 10%-percent handset market share. But Kailash, senior vice president of communication, said the Chinese market has been a "soft rib" relative to LG's global market share.

According to the data, LG's market share in China rose to 5% as of October 2010, but the share has fallen to less than 1% by the time.

High-end product weakness

"Although LG handset sales have increased, but mainly concentrated in the low-end market." This has led to a low profit margin for LG handsets. On the other hand, the repair of these hot products are also criticized by consumers. Kailash pointed out that LG sales of the main model terminal Price in general at 1000 yuan to 2000 yuan, high-end product line is weak, is LG in China's mobile phone market weakness.

In addition, the daily economic news reporter noted that LG in the global smartphone market is sluggish, LG is still lack of high-end smart models. Its blockbuster Lgoptimus has been attacked by Samsung Galaxy and Apple's iphone. By the end of August 2011, LG Mobile phone suffered a fifth consecutive quarterly loss. LG's second-quarter earnings show that LG's mobile phone business has fallen sharply from 120 billion won in the same period last year to 53.9 billion won.

To this end, in early July, LG Electronics down 2011 smartphone sales target to 24 million, down to 20%; LG Electronics at the same time its annual mobile phone total shipments to reduce the target of One-fourth to 114 million.