By Kim Yoo-chul, Lee Min-hyung
Google has named LG Electronics as its partner to produce the upcoming Nexus smartphone, industry sources familiar with the issue said, Thursday.
"Senior LG Electronics executives met with their Google counterparts in the United States recently. The main issue was how to expand their bilateral partnership in areas other than smartphones," said a source. He added LG was working on developing the Google Nexus at its technology center in Seoul.
The new Nexus, which will be released around October, is likely to have Google's new mobile platform, Android M, supporting Google mobile payment and finger-recognition systems. The display screen is said to be 5.2 inches.
As the Nexus is a reference model, LG Electronics will only handle the device's manufacturing within given specifications and features set by Google. LG was the main producer of the Google Nexus 5 a few years ago.
There have been expectations that this year's Google Nexus will be a mix of the LG G4 flagship that was released in April and the original LG Nexus 5 that was released in 2013.
But it's highly unlikely that LG Electronics will greatly boost its profits by acquiring a license to manufacture the Nexus as the Google reference model is intended to test its new software and solutions rather than for mass markets.
"Throughout the partnership with Google, LG Electronics hopes to join various futuristic business projects as the strongest backer for Google businesses," said another source.
Google representatives in Seoul declined to comment. LG said it can't comment on client-related issues.
As Google plans to support its mobile payment system in the new Nexus, competition for leadership in the global mobile payment market is expected to get more intense.
The iPhone designer Apple opened up the mobile payment market by putting Apple Pay on iPhones, followed by Samsung Electronics with Samsung Pay.
"Other smartphone manufacturers using Google Android as their main mobile platform have no option but to put the Android Pay on their upcoming phones," a source said.
Apple Pay, which was introduced in October in the United States, has secured 250,000 clients in the United Kingdom, representing Apple's commitment to expand the mobile payment business beyond the United States. Apple was in talks with card issuers in China and Canada.
Samsung plans to promote Samsung Pay after the release of the Galaxy Note 5 and Galaxy S6 Edge Plus. It is eyeing the China and European markets.
"By manufacturing the new Nexus phone, LG Electronics will understand Google's detailed plans for mobile payment services with it accessing related patents as a step before adopting such services into LG's next smartphones," a source said.