While LG is one of the bigger and more established names in the smartphone industry, the company hasn’t been doing quite as well as some of the competition. So much so that the company has since announced that they will be pursuing a new strategy that will involve outsourcing its lower-end and mid-range phones to others.
Similar to Samsung and Apple, LG makes their own smartphones (via suppliers and other manufacturers), but with this new strategy, it company would essentially be licensing out its brand to other companies who are interested in getting into the smartphone business but don’t have an established brand to work with.
With this strategy, LG would essentially outsource the work such as design and manufacturing to others, while leaving their stamp on these devices. An LG spokeswoman also confirmed to Reuters that the company has since abolished some research and production positions in an effort to help better focus on the company’s higher-end and more premium devices.
LG would not be the first company to make such a move. In the past, we’ve also seen this strategy used by BlackBerry who licensed out their brand to TCL, and Nokia who licensed out their brand to HMD. We’re not sure if this will work out for LG, but cutting back on their own design and manufacturing could certainly save them a lot of money.