SEOUL, KOREA – Strong determination on the part of LG Electronics Vice Chairman Koo Bon-joon is believed to have served as the driving force behind LG Electronics revising up its 2013 production target to a 100 million units.
By setting its production goal higher, LG Electronics, emboldened by the success of the LG Optimus G, is poised to soup up its SCM (supply chain management) competitiveness- i.e. its upstream segment that puts a brake on on LG’s smartphone business. As LG electronics had faltered in the smartphone market, its upstream business partners defected in drove. Some key LG partners even tried to strike deals with Samsung Electronics and Apple behind the back of LG Electronics.
To make matters worse, finding a new partner isn’t easy. Parts suppliers give priority to Chinese companies like ZTE and Huawei over LG Electronics in delivering their products. As such, LG Electronics is paying a hefty price for its long-drawn-out poor performance in the smartphone market.
However, some fear that raising production can eventually make a dent in LG’s profitability if LG smartphones are not selling as well as expected in the market. Just like Samsung Electronics suffered from an inventory of one million units with its Galaxy Tab early model, LG also can ends up with inventory pileups.
Sean Chung (hbpark@etnews.com)
**Article provided by etnews [Korea IT News]
[Reference] : http://english.etnews.com/electronics/2715655_1303.html
