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LG Electronics Is Said to Make New Google Nexus Phone

LG Electronics Inc. (066570) is developing a Nexus smartphone for Google (GOOG) Inc., becoming the third manufacturer to build phones for the U.S. company, according to a person with knowledge of the matter.

The device, to be shown this month, is based on LG’s Optimus G model, said the person, who declined to be identified because the project isn’t public.

For LG, its first Nexus project would deepen a partnership with Google as the Seoul-based company tries to compete with Samsung Electronics Co. Google has previously developed phones with Samsung and HTC Corp. (2498) to help maintain the dominance of its mobile operating system against Apple Inc. (AAPL)’s iPhone.

Jinny Lee, a Seoul-based spokeswoman for LG, and Shari Yoder Doherty, a spokeswoman for Google, declined to comment.

LG’s Optimus G, which went on sale in South Korea last month, has a 4.7-inch screen and runs on a processor made by Qualcomm Inc. (QCOM) for fourth-generation Long Term Evolution, or LTE, networks offering faster Internet connections.

Technology blogs, including BGR, have posted what they say are leaked photos of the new Nexus phone with LG’s logo.

LG’s mobile-phone division had an operating loss of 56.7 billion won ($51 million) in the second quarter, compared with Samsung’s operating profit of 4.19 trillion won at its telecommunications business. LG was No. 5 in global handset sales that quarter, and Samsung was No. 1, according to Gartner Inc.

Android, IPhone

Devices running Android controlled 64 percent of the smartphone market in the second quarter, compared with 19 percent for the iPhone, according to Gartner.

Samsung has sold about 500,000 Nexus S phones in the U.S. as of June 30, according to court documents filed in California as part of a patent dispute with Apple over devices including the Nexus.

The operator of the most-used search engine unveiled the Nexus 7 tablet computer, manufactured by Taipei-based Asustek Computer Inc., in June.

LG, the world’s No. 2 TV maker, has also worked on a set using Google software.

Google shares rose less than 1 percent to $744.56 at the close in New York yesterday. LG fell 0.6 percent to 67,200 won at the close of trading in Seoul, while the benchmark Kospi index dropped 0.8 percent.

To contact the reporters on this story: Jun Yang in Seoul at jyang180@bloomberg.net; Brian Womack in San Francisco at bwomack1@bloomberg.net

To contact the editor responsible for this story: Michael Tighe at mtighe4@bloomberg.net

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