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Posted : 2012-05-27 16:25
Updated : 2012-05-27 16:25

LG's smartphone dilemma lingers


LG’s Optimus LTE phone
By Cho Mu-hyun

LG Electronics’ long-term evolution (LTE) phone sales exceeded the 3 million mark Sunday but its difficulty in the smartphone market isn’t easing as competitors show numbers that drastically outperform the Yeouido-based company.

Korea’s second largest handset manufacturer announced Sunday that its LTE phones have reached 3 million global sales, barely a benchmark compared to numbers and market share by competing companies, especially Samsung Electronics.

Earlier in Barcelona, during the Mobile World Congress in February, LG stated its goal to sell 8 million LTE phones and a total of 35 million smartphones this year.

According to Strategy Analytics, the worldwide leader in handset sales for the first quarter of 2012 was Samsung with a 25 percent market share. Nokia was the runner-up with 22.4 percent, while LG had a mere 3.7 percent.

LG’s sales have steadily declined in the past year. In the first and second quarter of 2011 it held 6.9 percent of the global market share but it dropped to 5.4 percent in the third and 4 percent in the fourth quarters. The firm currently ranks ninth among global handset makers.

In LTE phones alone, LG is third with 13 percent, but Samsung is the undisputed leader marking 57 percent in market share, while Motorola is second at 17 percent. The numbers show a 7 percent decline for LG, which was in second place with 20 percent for the fourth quarter of 2011. In contrast, Samsung’s market share for the first quarter rose 16 percent from the previous one.

Strategy Analytics predicts total sales of 67 million LTE handsets worldwide this year, compared to 6.7 million shipped in 2011, and the declining market share of LG casts a dark shadow over its target.

Samsung’s first quarter sales of 92.5 million handsets is larger than LG’s goal for the whole of 2012.

“Our first quarter results were lower than expected but we have many plans for the second and third quarters so there will be no change in our sales target,” said LG Electronics CEO Park Jong-seok. “We want to provide a revolutionized user experience with models like the Optimus LTE 2 to solidify our position as an LTE powerhouse in the world.”

The firm is also suffering a drastic decline in revenue by marking 12.23 trillion won, a decrease from 13.81 trillion won from the previous quarter. LG is behind against Samsung in the TV business as well.

According to the firm, it reached 1 million sales domestically of its LTE phones as of May, while selling around 2 million in 10 other countries. It is aggressively tapping into the North American market, collaborating with Verizon Wireless to release the LTE phone Revolution by LG, and is planning to expand its presence to 20 nations by the end of this year.

LG currently sells its Optimus LTE smartphones within Korea, competing with Samsung and Pantech.

The shortage of Qualcomm’s “one chip solution,” which Park admitted was causing “difficulties” for the company, is also hampering LG’s possibilities to see better numbers by the end of the year.

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