The annual reshuffle at LG Electronics is raising speculation that the company may overhaul its smartphone business strategy.
LG Electronics appointed on Nov. 28 Kwon Bong-seok, head of the Home Electronics Business Division, to double as head of the Mobile Communications Business Division.
Kwon is credited with revitalizing the company's TV business by simplifying its complex TV lineup. Industry analysts are wondering whether Kwon would use the same strategy for the struggling smartphone business.
Since December 2014, Kwon has pursued a premium strategy for the company's TV business by drastically simplifying its TV lineup, which consisted of various 30- to 60-inch models. This change paid off. The TV business segment exceeded 8% in operating margin last year and is expected to reach 10% this year.
The challenge Kwon faces is how to deal with LG’s complex smartphone lineups. The company has five smartphone lineups. They are two premium series -- the V series and the G series -- and three budget series -- the Q series, the K series, and the X series. While this complex lineups allow the company to target consumers of diverse classes, it makes it difficult for consumers to understand the status of each series.
Some experts say that it is time for LG to think about a brand integration strategy. Samsung Electronics uses the single Galaxy brand for its smartphones. Recently, the company also changed the Gear Smart Watch to the Galaxy Watch to enhance the brand power of Galaxy.