01/13/2010
Financial Times
LG Electronics said on Wednesday that it aimed to overtake local rival Samsung Electronics to become the world’s number two mobile phone maker by 2012 as the South Korean group moved to strengthen its presence in the fast-growing smartphone business.
Last year, LG continued to expand its global market share to about 10 per cent, in spite of the global economic downturn, as its touch-screen multimedia phones gained increasing popularity abroad. But the world’s third-largest handset maker is a latecomer to the high-margin smartphone market, claiming less than 1 per cent of the market.
“We are facing another revolutionary change in the mobile industry thanks to the rapid growth of smartphones and demand for more content and better services,” Skott Ahn, president of LG’s mobile communications division, told reporters.
To achieve its ambitious goal, LG aims to sell 140m mobile phones this year, up 20 per cent from 2009. And the company plans to launch about 20 new smartphone models this year with half of them based on Google’s Android system.
LG said on Wednesday it has no plan to develop its own operating system for smartphones but would continue to work on platforms to develop more effective solutions.
The company plans to focus on producing easy-to-use smartphones aimed at first-time users and will work with some of the world’s top content developers to improve applications for its smartphones.
LG recently set up a smartphone task force within the company and beefed up the smartphone research and development workforce to 30 per cent of its overall mobile phone R&D workforce.
LG and its bigger rival Samsung have rapidly built global market share in conventional handsets thanks to their sleek design and advanced manufacturing systems. But they are struggling to catch up with Nokia, Research in Motion, and Apple in smartphones, which are mobile phones that double as mini-computers.
Gaining market share in the new segment is becoming increasingly important for the Korean handset makers as smartphones offer the highest margins and fastest growth at a time when overall handset sales are shrinking.
Gartner, the research group, expects the smartphone market to grow to 525m units in 2012 from 179m in 2009.
Analysts expect competition to intensify in the smartphone market this year as more players enter the market.
Last week Google unveiled the Nexus One, the US group’s challenge to the Apple iPhone .
Samsung is also seeking to become a bigger player in the market by launching a new mobile platform called Bada, which will give independent developers the tools to devise software applications for its handsets.
Samsung plans to deliver the biggest portfolio of smartphones to the market this year. The Korean group currently boasts more than 20 per cent of the global handset market but it holds only 4 per cent of the smartphone market, against Nokia’s 35 per cent and 17 per cent held by Apple.
