LG cuts staff amid market woes
LG Electronics confirmed to the Global Times Wednesday that the company's mobile phone operation in China is facing "inevitable personnel changes" due to streamlined sales channels, at a time when the company's cell phone sales are in decline in the country.
According to an anonymous insider from LG, the company's mobile phone operation in China has experienced two large-scale layoffs since last winter, resulting in 75 percent of staff leaving their positions.
"The layoff is still going on, as LG mobile phones have not been selling well," he told the Global Times via telephone, adding that the mobile phone sales department has been severely hit.
Details of the staff adjustment will be released soon, said the company in an official announcement sent to the Global Times via e-mail Wednesday.
This year's annual sales of LG phones are estimated in the tens of thousands of units, down from 4 million units in 2011 and 8 million in 2010, Wang Yanhui, head of Shanghai-based Mobile China Alliance, told the Global Times Wednesday.
"In order to survive in the domestic market, mobile phone makers have to provide either high-end products like Apple's iPhone, or fairly cheap ones like domestic brands mainly sold below 2,500 yuan ($401)," said Wang, adding that the majority of Chinese consumers prefer the medium- and low-end mobile phones due to price concerns.
With more support from domestic mobile carriers, Chinese mobile phone brands are expected to seize the medium- and low-end domestic market with their competitive edge in pricing and sales channels over international counterparts like LG and Motorola, whose products are nothing special despite their high prices, Li Yanyan, an industry analyst from Analysys International, told the Global Times Wednesday.
Data from the Beijing-based market research firm indicated that six domestic mobile phone makers with a total market share of 34.9 percent made the list of top 10 mobile phone brands in first-quarter sales volumes, compared to five domestic brands with 22.6 percent over the same period in 2011.
The robust growth of domestic mobile phone brands like Huawei, ZTE and Lenovo Mobile in the current market has given most international mobile phone makers a hard time, said Li.
Both Motorola Mobility and Nokia Corp also suffered layoffs in China this year.
"It is hard for LG or Motorola to fight for a position in the Chinese mobile phone market through price competition. They would do better to focus on the development of high-end products," Li said.
However, Wang Yanhui expressed concern that international mobile brands like LG might not make much profit on their high-end products, as the accessories for high-end mobile phones are controlled by Apple Inc and Samsung Mobile.
Wang also noted that LG and Motorola performed poorly worldwide for similar reasons as in the Chinese market.
"The layoff is still going on, as LG mobile phones have not been selling well," he told the Global Times via telephone, adding that the mobile phone sales department has been severely hit.
Details of the staff adjustment will be released soon, said the company in an official announcement sent to the Global Times via e-mail Wednesday.
This year's annual sales of LG phones are estimated in the tens of thousands of units, down from 4 million units in 2011 and 8 million in 2010, Wang Yanhui, head of Shanghai-based Mobile China Alliance, told the Global Times Wednesday.
"In order to survive in the domestic market, mobile phone makers have to provide either high-end products like Apple's iPhone, or fairly cheap ones like domestic brands mainly sold below 2,500 yuan ($401)," said Wang, adding that the majority of Chinese consumers prefer the medium- and low-end mobile phones due to price concerns.
With more support from domestic mobile carriers, Chinese mobile phone brands are expected to seize the medium- and low-end domestic market with their competitive edge in pricing and sales channels over international counterparts like LG and Motorola, whose products are nothing special despite their high prices, Li Yanyan, an industry analyst from Analysys International, told the Global Times Wednesday.
Data from the Beijing-based market research firm indicated that six domestic mobile phone makers with a total market share of 34.9 percent made the list of top 10 mobile phone brands in first-quarter sales volumes, compared to five domestic brands with 22.6 percent over the same period in 2011.
The robust growth of domestic mobile phone brands like Huawei, ZTE and Lenovo Mobile in the current market has given most international mobile phone makers a hard time, said Li.
Both Motorola Mobility and Nokia Corp also suffered layoffs in China this year.
"It is hard for LG or Motorola to fight for a position in the Chinese mobile phone market through price competition. They would do better to focus on the development of high-end products," Li said.
However, Wang Yanhui expressed concern that international mobile brands like LG might not make much profit on their high-end products, as the accessories for high-end mobile phones are controlled by Apple Inc and Samsung Mobile.
Wang also noted that LG and Motorola performed poorly worldwide for similar reasons as in the Chinese market.
