LG Electronics on Friday announced the sudden resignation of CEO Nam Yong amid the financial problems caused by its weak presence in smartphones.
The company will replace Nam early next month with Koo Boo-joon, a member of the founding family behind the LG conglomerate. But Yong will retain the CEO title until LG's AGM in March.
Koo has previously been CEO of LG International and an executive at LG Display, and is the brother of group chairman Koo Bon-moo, WSJ.comsaid.
LG Electronics reported a 90% slide in operating profit for the second quarter, as a result of 120 billion won ($103.4 million) worth of losses at its handset unit.
Nam's resignation is another sign that traditional handset players - whose strength is hardware and form factor - are struggling to find a way to compete in the smartphone era where software is king.
Handset leader Nokia, which is facing the same problems, last week replaced CEO Olli-Pekka Kallasvuo with Microsoft executive Stephen Elop. The company's smartphone chief, Anssi Vanjoki, and chairman Jorma Ollila also announced their resignations.
LG's presence in smartphones is tiny – it has an estimated market share of just 1%. The company took until last week to announce its first global launch of a line of smartphones – the Android-based Optimus One and Optimus Chic.
The vendor is hoping to sell 10 million units of the Optimus One, which will be sold by around 120 carriers worldwide, FT.comsaid.
In a nod towards the growing importance of software, the Optimus line has been optimized for Google mobile services, has integrated access to Android Market and includes LG App Advisor – an exclusive program that recommends 10 high-rated apps to download every two weeks.
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