Koo Bon Joon, LG CEO
SEOUL: LG Electronics Inc, the world's third-largest maker of mobile phones, replaced its chief executive officer after posting a record loss from the flagship handset business. The shares rose as much as 5.2 percent.
Koo Bon Joon, LG Group chairman Koo Bon Moo's younger brother, will replace Nam Yong effective Oct. 1, South Korea's fourth-largest family-run industrial group said in a statement today. Nam, 62, resigned to take responsibility for the "current difficult situation," it said.
LG Electronics rose the most in more than a month in Seoul trading on speculation Koo will turn around a company that failed to capitalise on the surge in demand for smartphones. The move comes a week after Nokia Oyj, the world's largest handset maker, replaced its CEO to challenge Research In Motion Ltd's BlackBerry and Apple's iPhone.
"Nam's resignation was inevitable given that LG has lagged behind in spotting the popularity of smartphones, relegating it to a second-tier name," said Im Jeong Jae, a fund manager at Shinhan BNP Paribas Asset Management Co in Seoul, manager of $27 billion in assets including LG Electronics.
"Investors seem to view this appointment as the company's will to pull itself together to come up with a better business strategy for mobile phones, but whether it will succeed remains a question mark."
The Seoul-based company in July posted a record 120 billion won ($103 million) at its handset business during the second quarter and profit at the home-entertainment division, which makes televisions, plunged 90 per cent. The company said at the time the handset division may recover in the fourth quarter as it aims to introduce about 20 smartphone models this year.
Nokia, based in Espoo, Finland, said Sept. 10 it hired Stephen Elop from Microsoft Corp as the company's next CEO, seeking to reclaim the more than $60 billion in market value lost following Apple's entry in the phone market in 2007. Days later, Anssi Vanjoki, head of Nokia's smartphone division, resigned.
Koo Bon Joon, LG Group chairman Koo Bon Moo's younger brother, will replace Nam Yong effective Oct. 1, South Korea's fourth-largest family-run industrial group said in a statement today. Nam, 62, resigned to take responsibility for the "current difficult situation," it said.
LG Electronics rose the most in more than a month in Seoul trading on speculation Koo will turn around a company that failed to capitalise on the surge in demand for smartphones. The move comes a week after Nokia Oyj, the world's largest handset maker, replaced its CEO to challenge Research In Motion Ltd's BlackBerry and Apple's iPhone.
"Nam's resignation was inevitable given that LG has lagged behind in spotting the popularity of smartphones, relegating it to a second-tier name," said Im Jeong Jae, a fund manager at Shinhan BNP Paribas Asset Management Co in Seoul, manager of $27 billion in assets including LG Electronics.
"Investors seem to view this appointment as the company's will to pull itself together to come up with a better business strategy for mobile phones, but whether it will succeed remains a question mark."
The Seoul-based company in July posted a record 120 billion won ($103 million) at its handset business during the second quarter and profit at the home-entertainment division, which makes televisions, plunged 90 per cent. The company said at the time the handset division may recover in the fourth quarter as it aims to introduce about 20 smartphone models this year.
Nokia, based in Espoo, Finland, said Sept. 10 it hired Stephen Elop from Microsoft Corp as the company's next CEO, seeking to reclaim the more than $60 billion in market value lost following Apple's entry in the phone market in 2007. Days later, Anssi Vanjoki, head of Nokia's smartphone division, resigned.
Read more: After Nokia, LG dumps CEO - The Times of India http://timesofindia.indiatimes.com/tech/news/hardware/After-Nokia-LG-dumps-CEO/articleshow/6570402.cms#ixzz0zqqfQ4sj
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