LG Cuts Smartphone Sales Target 20% on Rivals
Stock Chart for LG Electronics Inc (066570)
LG Electronics Inc. (066570), the world’s third-largest mobile-phone maker, lowered its full-year smartphone sales target by 20 percent after losing customers to competitors led by Apple Inc. (AAPL) and Samsung Electronics Co.
The company expects to sell 24 million smartphones this year, Park Jong Seok, head of the mobile business, said at a media briefing today in Seoul. The company had previously forecast 30 million.
LG’s mobile-phone division had an operating loss of 100.5 billion won ($94 million) in the first three months of the year, contributing to a second straight quarterly loss for the company. While the business is “slowly” improving, it’s unclear when it will turn around, Park said.
“It’s hard to give an exact timing, because there are so many market variables, and the situation changes quickly,” he said.
The company said in February it aims to quadruple smartphone sales this year by introducing 20 new models. Including other types of handsets, the company will probably sell about 114 million units this year, also lower than the February goal to sell 150 million phones, Park said.
Koo Bon Joon, who took over as chief executive officer in October, told reporters last month that it will be difficult for the handset unit to return to profit in the second quarter.
The company is counting on its Optimus smartphones running Google Inc. (GOOG)’s Android software to revive earnings. The handset maker in February unveiled an 8.9-inch tablet computer called the LG Optimus Pad and the LG Optimus 3D smartphone capable of recording 3-D images.
LG expects the 3-D handset to sell 1.7 million units by the end of the year, Park said.
“We want to differentiate ourselves with good hardware such as the 3-D model by taking advantage of what we are strong at, like displays,” he said.
The company is working on a new model equipped with a high- definition 4.5-inch screen, Park said.
LG’s share in the global mobile-phone market declined to 5.6 percent in the first quarter from 7.6 percent a year earlier, Gartner Inc. said on May 19.
Apple’s share in the global smartphone market increased to 18.7 percent in the first quarter from 15.7 percent, while Samsung had its share more than double to 10.8 percent from 4.3 percent, according to researcher IDC.
LG is holding off selling its Android tablet computer in South Korea because of a “big change” in the tablet market caused by the new iPad since LG introduced its product in February, Park said.
LG will still release the product in some overseas markets “defined as meaningful,” he said.
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