2/4/2011 10:17:00 AM
LG bids to claw back UK share
LG Mobile is launching an eleventh hour bid to grab back market share in the UK with a major divisional overhaul.
The reshuffle of the business will see LG UK mobile chief Jim Michel (pictured) take direct responsibility for the mobile unit’s marketing and supply chains, which previously reported into LG Electronics.
The move, driven by executives at the Korean manufacturer’s Seoul headquarters, could also see the mobile unit run as a standalone business.
It gives LG UK more autonomy and accountability over the business, as well as the freedom to tailor-make marketing campaigns and routes to market.
If the spin off goes ahead Michel will report directly to LG Mobile’s president in Seoul, rather than to LG Electronics in Europe, as he does now.
The decision will be made in the coming weeks.
An LG source said: ‘The decision on whether we stand alone, whether mobile reports into Europe or into the president [of mobile in Korea] is still under review. The decision is coming right from the top.’
LG is under pressure to recoup share that it lost in 2010 after it was late entering the smartphone market and failed to leverage other parts of the business.
Its new Optimus Black device uses battery and screen technology from across the LG portfolio. Meanwhile, the Korean manufacturer is hoping to leverage partnerships such as its relationship with Dixons to sell its set of converged products. This could work more efficiently if the mobile unit is not spun off, sources indicated. LG is Dixons’ biggest supplier of TVs.
One source said: ‘Maybe if we are doing a convergence piece, then mobile and TV reps could go together to present to Dixons.’
Industry experts claimed that LG could save time and costs by spinning off mobile. One source said: ‘If you spin off, you handle your own profit and loss and you can’t hide. But there are a lot of efficiencies to be made.’
CCS Insight analyst Ben Wood said: ‘LG dropped the ball last year. But what has impressed me is they said 2011 would be the year they came back.
‘At CES they launched the first dual-core smartphone, the Optimus 2x, and the Optimus Black saw them grab the bull by the horns and say they aren’t going to miss opportunities.’
However, he added: ‘The UK is one of the key markets around the world and LG needs to get it right.’