LG To Close Korean Phone Manufacturing Plants - Relying On Cheaper Overseas Factories
by Andrei Frumusanu on April 25, 2019 6:00 AM EST- Posted in
- Mobile
- LG
- Smartphones
LG’s mobile division has seen a tough couple of years – the last few generation of smartphones haven’t been very successful for the company, and consequently the division has reportedly making a loss for 10 straight quarters.
According to Yonhap News Agency, LG is planning to shut down smartphone manufacturing in its domestic Korean Pyeongtaek plant and shifting production over to its existing facilities in Vietnam. Reportedly, the Korean plant was mostly responsible for high-end model production, which would include phones such as the recent V40 series or the new LG G8.
The move, while alleviating LG’s balance sheet and losses, doesn’t seem too promising in terms of the future of the mobile division, as it continues to struggle with delivering competitive products. We’ll be covering the LG G8 in a full review soon.
Update: LG has issued an official statement:
Relocating our smartphone manufacturing operation from Pyeongtaek, South Korea to the newly expanded campus in Haiphong, Vietnam is all part of a larger strategy to improve our mobile business and to raise our competitive edge in an evolving industry.
This relocation is part of a broader capital investment to expand LG’s smartphone business as the Haiphong Campus, which commenced operation in 2015 with a USD 1.5 billion investment, is ideally suited to take on the task of producing high quality, competitive products for the global market.
LG will benefit from the expansion of efficiencies and synergies as Haiphong was designed with the capability to manufacture a wide variety of products, from washing machines and TVs to auto infotainment systems and smartphones. The majority of the Pyeongtaek workforce will be relocated to Changwon, South Korea to support LG’s fast-growing home appliance business.
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Source: Yonhap News Agency
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shady86 - Thursday, April 25, 2019 - link
LG has never recovered since the bootloop scandal with G3/G4 series. I'm not surprised if they are out of the market soon with not much innovations and poor quality reputation.porcupineLTD - Thursday, April 25, 2019 - link
They also refused to increase battery capacity even though LG fans wanted that.The battery is no longer removable even though LG fans loved that.
They added the retarded notch that NOBODY wanted (an LG rep hosted an AMA about notches on reddit before the G7 came out and subsequently deleted it after almost all the comments were against notches.)
I'm just waiting for them to remove the headphone jack and in exchange give the ability to unlock the phone with one's ass.
porcupineLTD - Thursday, April 25, 2019 - link
Edit: it was not an AMA it just asked users what they thought about notches.PeachNCream - Thursday, April 25, 2019 - link
The last couple of years have not been kind to any phone manufacturer. Handset upgrades have declined significantly as people use existing phones for longer than in the past. I think they're tired of the drumbeat of new phones and are not seeing much reason to move to the latest. Costs have gone up, headphone jacks are absent from a number of newer models, batteries can no longer be easily replaced, and performance increases are not yielding a better user experience. OEMs are tossing mud against the wall with gimmicks like folding screens, a plurality of camera sensors, and notches that people simply do not care about given the price penalty needed to obtain them.Midwayman - Thursday, April 25, 2019 - link
Doesn't help that subsidies have dried up. Used to be able to get all sorts of good deals and these days they're usually *with trade-in. With trade-in values less than you could get on ebay or swappa. I'm much more okay with waiting 6-9 months into a phones life to pick up deals than I used to be since they're useful life is so much longer.name99 - Thursday, April 25, 2019 - link
You sure about that? ALL phone manufacturers?https://www.statista.com/chart/14948/apple-iphone-...
I'd say Apple is doing OK. And I'd say that your bundling a random collection of gripes that, viewed superficially, apply as much to Apple as to struggling manufacturers, shows a serious lack of interest in actually understanding the subject.
Is the problem a notch or is it a lack of accompanying benefit (instant, highly performant, FaceID)?
Is the problem a lack of headphone jack, or a lack of accompanying benefit (well-performing, easy to use, bluetooth headphones)?
khanikun - Friday, April 26, 2019 - link
Your link is outdated by how long? 5 months? Literally the link is 2 months after it's release. Of course it shows strong sales, although even in your own link, it's flat. It's just higher revenue, cause the thing costs more.Apple iphone sales are lower than expected and to prop it back up, they'd resorted to lowering their prices. 4 months after release, they started lowering their prices. When was the last time Apple did that? It's gotten bad enough that Apple doesn't even tell anyone their sales figures anymore.
Here's what we know of today about Apple and their iphone sales. You can google all the info if you'd like.
Apple iphone production has be cut by an estimated 10%. No one knows for certain, cause when their iPhone sales tanked, they stopped giving sales figures. Obviously a sign of bad times.
Everyone who produces something for the iphone have had to reduce their profits forecast. Samsung cut their forecast, as they make iphone screens. Lumentun cut their forecast, as they make face id components. Even smartphone case manufacturers cut forecasts.
You can say Apple is doing OK all you want, but data shows otherwise. I agree with you on the gripes, as I don't think those are really any concerns on it's sales performance. It might have when they first started doing it, but I don't imagine it matters anymore today.
I do agree with PeachNCream on the gimmick features they are throwing on phones today to try to lift sales. I just don't see it increasing sales, as the cost for them are just so high or it's a feature most don't care about. It reminds me of the days when non-smartphones were getting things like 3D cameras, point & shoot cameras jammed into the phone, or what have you. I see folding screens as something people do want, but not at the price points they are currently setting.
Xex360 - Thursday, April 25, 2019 - link
LG lost all credibility by just blindly copying the worse of the competition, they had very interesting designs in the v10/20 and the G4/5/6.Chaser - Thursday, April 25, 2019 - link
LG, design a phone that is competitive and actually sells and you won't have to move production out of your home country. Those are jobs fellow Koreans are now going to lose.Gunbuster - Thursday, April 25, 2019 - link
Close all factories, they have no consumer traction. I have literally NEVER seen a human in person with an LG smartphone.