LG Wants to Become World's No. 2 Handset Maker

LG Electronics is aiming to become the world's No. 2 handset maker by 2012, according to the head of the company's handset division.

LG Electronics is aiming to become the world’s No. 2 handset maker by 2012, according to the head of the company’s handset division. “We will become the global No. 2 in 2012, and that goal applies to smartphones as well,” Skott Ahn, president and CEO of LG’s mobile communications division, said at a news conference, according to this Reuters story. Basically, LG is taking on Nokia and Samsung, the world’s No. 1 and No. 2 players today, as well as Research In Motion and Apple.

I find the announcement somewhat surprising, given LG’s weakness in smartphones. More than 41% of U.S. mobile subscribers are likely to switch from feature phones to smartphones in the coming months, according to consultant Yankee Group. In May, LG likely lost some market share in both the U.S. and Europe, according to in-store surveys conducted by Avian Securities.

The company is yet to hit on a true best-seller in smartphones. It still needs to get closer to many carriers favoring rivals: Part of the reason LG has lost share in the U.S. is that carrier Verizon Wireless chose to promote a competing, Samsung product, according to Avian. It’s facing increasingly tough competition from the old guard, Nokia and Samsung, as well as newcomers like Apple.

That’s not to say that LG can’t do it — it may. The company is a recognized mobile industry innovator, having launched an iPhone-like touch-screen phone, LG Prada, months before Apple unveiled its now-legendary mobile device. More recently, it showcased a cool-looking watch phone. What’s more, competitors such as Motorola have been losing share — share that is up for grabs. That said, LG will face an uphill battle.

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