 mobile business chief |
Staff reporter
LG Electronics will make a comeback in the smartphone field, now dominated ― domestically ― by Apple and Samsung Electronics, Ahn Seung-kwon, the company's mobile business chief, said Thursday.
Ahn said that his company is planning to launch more premium smartphone models this year. They are based on Google-powered Android and Microsoft's Windows Mobile, and North America and Europe will also be targeted.
"We will boost our premium lineup," Ahn said in an interview.
His comments came at a time when LG has become a bystander in the battle between Apple and Samsung in the important mobile segment.
This produced a significant drop in operating profit in LG's mobile business to 0.9 percent in the first quarter of the year from more than 10 percent in previous quarters. The trend is widely forecast to continue with a further slide in the second quarter.
"We didn't expect the smartphone market to mature this quickly," Ahn said. "We will make a comeback in the third quarter." He explained that 10 design-focused and specification-rich smartphones will be marketed.
Ahn is targeting a global market share of over 10 percent by 2012.
The company's strategy is not to create its own platform, as has Samsung with the "Bada" platform.
Ahn is betting on the existing Android operating system first.
"LG Electronics will concentrate on developing devices that take full advantage of the Android and Windows Mobile 7 systems for the next year or two," he said.
Citigroup said Android has made significant progress in the North American consumer market.
Smartphones allow users to surf the Internet, watch video, listen to music and install applications that let them do a wide range of mobile activities from finding restaurants to reading books.
LG has plans to upgrade its partnership level with Google and Microsoft. Ahn said LG has recently created a new unit handling mobile content and related services.
LG currently has thousands of applications in its apps store, which are offered free of charge.
"We are working on a revenue sharing model with developers but LG will boost application services."
Asked when his company will launch an "iPhone Killer," Ahn said the schedule to market a smartphone that runs on the Windows Mobile 7 operating system in the second half of the year was underway.
"LG will introduce Windows Phone 7 sometime in the latter half," he said.
Maintaining sale targets
Worries are running high over LG's phone sales target of 140 million handsets for this year as market analysts are still skeptical about its capability in the smartphone business.
But Ahn said he won't revise downward the sales goal "for the time being," as LG has seen steady demand for low-priced phones.
"We are not changing our goal. We will boost our smartphone lineup while maintaining our existing lineup of feature handsets such as Chocolate phones," he said.
Such phones still account for 80 percent of the company's global sales.
LG is adopting a "two track strategy" to meet the 2010 sales target ― smartphones for developed markets and trendy phones in developing markets.
"A complete demand shift toward smartphones by consumers in emerging markets will need more time, while the demand for them is undergoing a rapid rise in developed countries," LG's mobile chief said.
Already that strategy is being put into practice.
LG has recently divided its handset unit into two ― smartphones and feature phones. It has created a "Global Operation Center," which is responsible for manufacturing, supply chain management and product quality.
"It is aimed at strengthening LG's feature phone business steadily and detailing strategies amid the increasing smartphone fever," Ahn said.
LG is also eager to strengthen its sales channels in key emerging markets India and China.
Ahn said the expansion of these was necessary to boost global sales. LG's market share in India stands at 5.9 percent.
He also showed keen interest in nurturing fourth-generation or long-term evolution (LTE) technology to enjoy an "early adopter" advantage.
Promising speeds that rival home broadband connections, 4G is expected to take cellular services to the next level.
That means faster downloads for bigger files or faster transmissions of larger amounts of data.
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