Date:25/04/19
LG Electronics Inc said on Thursday it would stop producing smartphones in South Korea and move manufacturing to Vietnam, joining global rivals in reorganizing production as they battle a slump in global demand.
The restructuring of its money-losing business comes as LG, once one of the world’s top three mobile phone makers, has seen its global market share spiraling to less than 3 percent in the decade that smartphones came to dominate the mobile market.
“I find its decision positive,” said analyst John Park at Daishin Securities.
“Their existence may be barely noticeable in the global smartphone market, but they have solid presence in the U.S. market. It’s too early for them to close the whole business when fifth generation (5G) networks are starting,” Park said.
LG is ranked third in the U.S. smartphone market, with a 17 percent share as of the third quarter of 2018, showed data from market researcher Counterpoint, after Apple Inc and Samsung Electronics Co Ltd.
LG, whose smartphone business has been losing money for several years, said in a statement that shifting production will boost annual capacity of its smartphone plant in Vietnam by 83 percent to 11 million handsets from the second half of 2019.
It said Vietnam provides an “abundant labor force”, and that 750 workers at its South Korean handset factory would be relocated to its home appliance plant.
LG also makes smartphones in China, Brazil and India.
The shift comes after Samsung, the world’s biggest smartphone maker, said late last year it would cease operations at one of its mobile phone plants in China.
Japan’s Sony Corp is also closing its Beijing smartphone plant as it works to make its money-losing handset business profitable.
Shares in LG Electronics gained 3 percent, versus a 0.2 percent decline in the broader market as of 0224 GMT.
LG Electronics to shut South Korea phone plant, move production to Vietnam
LG Electronics Inc said on Thursday it would stop producing smartphones in South Korea and move manufacturing to Vietnam, joining global rivals in reorganizing production as they battle a slump in global demand.The restructuring of its money-losing business comes as LG, once one of the world’s top three mobile phone makers, has seen its global market share spiraling to less than 3 percent in the decade that smartphones came to dominate the mobile market.
“I find its decision positive,” said analyst John Park at Daishin Securities.
“Their existence may be barely noticeable in the global smartphone market, but they have solid presence in the U.S. market. It’s too early for them to close the whole business when fifth generation (5G) networks are starting,” Park said.
LG is ranked third in the U.S. smartphone market, with a 17 percent share as of the third quarter of 2018, showed data from market researcher Counterpoint, after Apple Inc and Samsung Electronics Co Ltd.
LG, whose smartphone business has been losing money for several years, said in a statement that shifting production will boost annual capacity of its smartphone plant in Vietnam by 83 percent to 11 million handsets from the second half of 2019.
It said Vietnam provides an “abundant labor force”, and that 750 workers at its South Korean handset factory would be relocated to its home appliance plant.
LG also makes smartphones in China, Brazil and India.
The shift comes after Samsung, the world’s biggest smartphone maker, said late last year it would cease operations at one of its mobile phone plants in China.
Japan’s Sony Corp is also closing its Beijing smartphone plant as it works to make its money-losing handset business profitable.
Shares in LG Electronics gained 3 percent, versus a 0.2 percent decline in the broader market as of 0224 GMT.
Views: 328
©ictnews.az. All rights reserved.
Similar news
- Azerbaijani project to monitor disease via mobile phones
- Innovative educational system to be improved under presidential decree
- NTRC prolongs license of two TV and radio organizations for 6 years
- Azerbaijan establishes e-registry for medicines
- Azerbaijani museum introduces e-guide
- Nar Mobile opens “Nar Dunyasi” sales and service center in Siyazan city
- International conference on custom electronic services held in Baku
- OIC secretary general to attend COMSTECH meeting in Baku
- Azerbaijan develops earthquake warning system
- New law to regulate transition to digital broadcasting in Azerbaijan
- Azerbaijani State Social Protection Fund introduces electronic digital signature
- Intellectual traffic management system in Baku to be commissioned in December
- Tax Ministry of Azerbaijan started receiving video-addresses
- World Bank recommends Azerbaijan to speed up e-service introduction in real estate
- Azerbaijan to shift to electronic registration of real estate
