LG Electronics will reportedly adjust its overall business operations through a shift in operational resources from smartphones to LCD TVs. Taiwan-based players in the smartphone supply chain hold the opinion that LG does not need to downsize its smartphone business but instead needs to strike a balance between shipments and gross margins and integrate its marketing for smartphones, tablets and smart TVs.

　　Due to intense market competition and high marketing costs, LG's smartphone business operation swung from profitability to the red in the third quarter of 2013, the sources noted. However, the loss was essentially an investment in product development and marketing in the initial stage, the sources pointed out. Sony Mobile Communications and Lenovo, for example, suffered losses from their smartphone operations for a long time and LG's losses have been relatively small, the sources indicated.

　　Viewing that LG has attained large-volume shipments of the Nexus 4 and Nexus 5 at the sacrifice of gross margins, LG has to make more balanced considerations when it comes to shipment volumes and gross margins by launching a more diverse smartphone lineup covering the high-end, mid-range and entry-level, the sources pointed out. In addition, LG has to strengthen its tablet product line because tablets are complementary to smartphones in marketing, as well as integrating marketing efforts to promote the sale of smartphones, tablets and smart TVs for which only LG, Samsung Electronics and Sony are able to deliver among smartphone vendors, the sources indicated.