LG’s smartphone division has been struggling for years. Despite the fact that the company markets surprising and original models, the sales figures are unfortunately lagging behind. The company therefore wants to redesign the smartphone division and only focus on high-end devices.
This is evident from a message from Reuters. This shows that LG is working on ODMs, which stands for ‘original device manufacturer’. This term is used to describe external companies that may use the LG logo, while the devices are actually not made by the manufacturer itself, but by this external company. Since LG’s smartphone division has been at a loss for years (22 consecutive quarters), it was time to change course. By outsourcing the cheaper devices and midrangers, the South Korean manufacturer hopes to save money and be able to compete better with Chinese competitors. The company does want to continue to develop devices in the higher segment. In recent years, the company has been able to distinguish itself with unique designs, such as the Wing with the rotating screen and the Velvet with two screens. Unfortunately, it did not become real sales topper
Outsourcing with ODMs is not new
Do not think that outsourcing is new. Also devices from other well-known manufacturers such as Samsung are sometimes not made by the company itself, but via such a construction via another company.