LG loses chief executive following record making losses

South Korea’s LG Electronics – the World’s third largest mobile phone supplier – has ousted its chief executive Nam Yong, blaming him for LG’s lack of sales, and is replacing him with a founding family member in a bid to turn around its loss-making mobile phone business.

Following a record $103 million loss in the firm’s mobile handset business in the second quarter, Nam Yong had offered to resign from the helm and take responsibility for poor management, he will be replaced by Koo Bon-joon, the head of trading firm LG International.

Nam is the second CEO of a major mobile phone maker in a week to lose his job after the world’s No.1 handset maker, Nokia, last Friday replaced Olli-Pekka Kallasvuo with Stephen Elop, a Canadian Microsoft executive.

Both LG Electronics and Nokia have been under pressure due to a lack of strong smartphone models to rival Apple’s iPhone and Samsung Electronics Galaxy S. LG’s mobile business reported a record loss last quarter and warned of a similar loss this quarter.

Jonathan Leggett of mobile phone comparison website Top10.com, said “LG’s sluggish sales haven’t been helped by its failure to forecast the rise of the Android operating system, which has allowed HTC, Motorola and Samsung to eat into its market share. It has also been hurt by a sea change in consumers’ buying habits, as demand for the mid-range phones for which LG is known, such as the Cookie, waned and more and more people opted for powerful, high-end smartphones instead.

“LG’s sole Android offering so far, the Optimus, looks underpowered compared with the likes of the Samsung Galaxy and HTC Desire. The next generation of LG phones running Google’s OS are an improvement, but the company’s intertia means it will now face an uphill struggle to unseat those brands as the go-to phone makers for Android.”

comScore figures from yesterday show the LG lost 0.6% share in the US and none of the company’s smartphones have yet hit the 1 million unit sales mark.

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