LG revamps to contend with dismal G5 sales

LG Electronics on Friday announced it has administered a massive organizational overhaul to its mobile communications division in the aftermath of disastrous sales of its flagship G5 smartphone.

The consumer electronics arm of LG Group’s reshuffle at the beginning of July is unusual, but the company said it was meant to “resuscitate the atmosphere by quickly addressing its failure to satisfy the market’s expectations for G5.”

The nation’s No. 2 smartphone producer in Korea created a new position called program management officer, who will oversee a product’s business process ranging from development to marketing and sale to the end-users.

Before, the division had function-based departments, but this reorganization is product-based. The program manager will report directly to Cho Juno, president of LG Electronics.

As part of Friday’s reshuffle, the sales function division will be assimilated into the Korea sales and marketing subsidiary so that some of the home-based sales expertise can help the market performance of LG’s smartphones, the company said.

Overseas, mobile communications sales will be led by Lee Yaun-mo, the former head of North American sales. Under Lee’s leadership, LG’s smartphone market share in North America rose to 18 percent in the first quarter of this year from 11 percent in 2013.

The G5 was designed to compete against Samsung’s Galaxy S7. It was launched on March 31, roughly 14 months after Google unveiled its “Spiral 2” prototype of its Project Ara modular phone. The G5 is the first such phone to come to market. Modules that expand the functionality of the phone can be snapped on to the body.

But the G5 bombed in the market, at least partly because it did not meet fevered expectations. The company will probably post an operating loss in the second quarter because of the phone’s cool reception.

BY LEE DONG-EUN [lee.dongeun@joongang.co.kr]