LG and Samsung report tough times

I've had a lot of items recently on how tough things are in the consumer electronics channel -- especially for Tweeter and Circuit City. But when the channel is hurting, things are likely to be equally unpleasant for their suppliers. Korea Times has an article on the problems the big Korean electronics companies are facing.

Both Samsung and LG posted poor third quarter results -- Samsung's profit down 44%, LG down 93%.

Samsung's plan is to cut back investment in memory chips and to slow production of LCD panels to offset rising inventories. They also dropped their takeover bid for SanDisk to preserve cash. A positive step is to improve their supply chain:

The world's No. 1 memory chip and liquid flat-screen maker plans to maintain its current leadership by cutting costs and solidifying supply chain management networks.

LG is going to move to the low end of the mobile phone market, although there seems to be some concern about risks, some of which involve their channel:

"The recent decision to change handsets policy to low-tier phones is somewhat risky because there is no guarantee of success without selling channels and a stronger brand image. But there isn't an option for the time being,'' said an LG insider.