Ahn Seung-kwon
Chief of LG Electronics’ mobile business |
By Kim Yoo-chul
Staff Reporter
LG Electronics plans to sell 120 million mobile phones this year, up 20 percent from a year earlier, the chief of the company's mobile business said.
"We have raised the sales target of mobile phones to 120 million this year. Although the economic downturn has cut our growth potential, the revised target is achievable," Ahn Seung-kwon, the head of LG's mobile business told The Korea Times, Tuesday.
"The target consists of 75 million GSM-based phones and 45 million CDMA-based ones," the CEO said. In 2008, LG sold 45 million CDMA-based mobile phones.
In the first half of this year, LG sold a total of 52.4 million handsets ― 22.6 million in the first quarter and 29.8 million in the second quarter.
The announcement of the ambitious goal came on the sidelines of Ahn's participation in a campus recruiting event called "LG Day" held at Seoul National University (SNU).
"LG's mobile phone business has been making an annual average growth of 25-30 percent in the global market. The expansion pace is the fastest among the world's big five," according to the top executive.
In the second quarter, LG Electronics' share of the global handset market reached over 10 percent thanks to robust sales of key models, according to Strategy Analytics (SA), a Boston-based market research firm.
"LG will become the world's second-biggest handset maker by 2012 through profitable growth in mid- and high-end models," he said.
Asked about strategies for next year, Ahn said LG will put more focus on strengthening its smartphone-related portfolio. "LG will continue employing an expansionary plan next year. But it's an exaggeration that LG will sell 170 million in 2010."
Still, analysts say LG faces many hurdles to unseat its biggest hometown rival Samsung Electronics.
No Currency Risks
Asked about the effects of the strengthening won, Ahn said, "LG forecasts the won-dollar exchange rate will move to around 1,200 at the end of this year. But the strong won is unlikely to heavily hit our sales," adding a healthy demand for consumer electronics in developed markets such as North America and Europe is helping the Korean handset maker.
A strong won against the U.S. dollar is weighing on exports as the strengthening local currency is dragging down the price competitiveness of LG on overseas markets.
Such remarks present a striking contrast to negative forecasts for LG's second-half outlook painted by foreign brokerages.
Morgan Stanley had expected LG's mobile business growth rate for the latest quarter to remain at 5 percent, while Nomura also lowered its estimate for LG profits in the fourth quarter citing decreased shipment of handsets and currency fluctuations.
"The one thing I can clarify is that we will secure our bottom line. Better product mix-up and a better outlook for the upcoming strategic phone ― New Chocolate ― will help us," he said.
The upgraded Chocolate mobile will make its market debut Wednesday in Europe, while the device is set to be introduced on the South Korean market on Sept. 27, according to the executive.
yckim@koreatimes.co.kr
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