LG attempts smartphone comeback with focus on tech

LG is targeting a fourfold increase in smartphone shipments this year as it makes up for ground lost last year

LG Electronics expects to sell more than 30 million smartphones this year, a fourfold increase over 2010, when it stumbled by being late to catch on to the smartphone trend.

The world's third biggest mobile phone vendor after Nokia and Samsung Electronics plans to launch 20 smartphone models globally this year and hopes it can entice people with high technology. One of its new phones, the Optimus 3D, allows users to take pictures and video in 3D, and view 3D on its 4.3-inch screen without using special glasses.

"We’re excited about the prospects of the LG Optimus 3D taking the smartphone experience to a much higher level,” said Park Jong-seok, president and CEO of LG Mobile Communications, in a statement.

The focus on new products means LG will expand its research and development workforce to more than 6,000 people, up 15 percent over last year, and invest heavily to boost its overall capability.

Last year, LG struggled.

The company didn't even come close to its 2010 mobile phone target of 140 million units, shipping only 116.7 million, which was down slightly from the previous year. The South Korean electronics giant's handset division also posted an operating loss of 658 billion Korean won (US$587 million) last year, and the value of sales fell 25 percent year on year.

Market researcher IDC blamed LG's performance on an aging portfolio of handsets and low prices in emerging markets, and said the company lost market share due to the fumbles.

LG's global handset market share dropped to 8.4 percent last year from 10.1 percent a year earlier, according to IDC figures, as rivals made a grab for its customers.

Samsung Electronics, the second biggest mobile phone vendor last year, increased its global market share to 20.2 percent from 19.4 percent, while smaller rivals ZTE and Apple both gained on LG. Chinese phone maker ZTE increased its share to 3.7 percent from 2.3 percent, while Apple's market share rose to 3.4 percent from 2.1 percent.

Worse for LG last year was its negative growth rate. It shipped 1 percent fewer mobile phones in 2010 than in 2009, according to IDC, while Samsung shipped 23.3 percent more to 280.2 million units. Shipment growth rates among smaller rivals was far better even than Samsung's, with ZTE gauging a 94 percent increase in mobile phone shipments to 51.8 million and Apple achieving an 89.2 percent boost to 47.5 million.

IDC estimates the worldwide mobile phone market will be driven largely by smartphones through the end of 2014, including a 44 percent increase in smartphone shipments this year alone.

The success of LG's Optimus One smartphone was one bright spot for the company last year, according to IDC, and sales of other smartphones appear strong. LG said its Optimus Black, a thin, light Android smartphone with a 4-inch display that can be read in any lighting situation, has already garnered 2 million pre-orders since it was unveiled in early January.

Analysts believe LG will need several similar smartphone hits this year to regain its lost luster.

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Dan Nystedt

IDG News Service
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