LG's lag in smartphones hits profits
30-07-2010
It struggles to bring out a smartphone that defines its brand
LG Electronics, the world's third-largest mobile phone maker, has announced a 90 per cent drop in operating profit in the April-June quarter, hit by a loss at its handset division as it struggles to keep up with rivals in the smartphones race.
LG has vowed to overtake Samsung Electronics as the second-biggest maker of handsets by 2012. It has about 10 per cent of global share compared with Samsung's 20 per cent.
LG said earlier this year that it was devoting 30 per cent of its mobile phone research and development labour force to working towards a breakthrough in smartphones, in which it has about 1 per cent of the global share. But it has been trailing Apple and local rival Samsung Electronics in the race to unveil compelling smartphones.
Samsung has rushed out its Galaxy S smartphone to compete with Apple's iPhone, but LG's plans have yet to gain traction.
"LG does not have a smartphone that defines its brand" said Ha Eun-mi, analyst at HI Investment and Securities in Seoul, speaking to Financial Times. "They jumped into the smartphone market very late, trying to catch up with competitors who started one or two years earlier"
LG's strategy was to compete for the luxury niche, including expensive "feature" phones such as the Prada, in conjunction with the fashion house. The Prada phones and later LG multimedia models lacked the iPhone's wide-ranging computer-style features.
The handset maker is counting heavily on the success of a smartphone, based on Google's Android operating system, that it is due to launch this quarter.
Im Jeong Jae, a fund manager at Shinhan BNP Paribas Asset Management, told Bloomberg the company needed to regain investors' confidence in its mobile phone business, but added that "the environment doesn?t seem too bright"
Based on story in ft.com
LG Electronics, the world's third-largest mobile phone maker, has announced a 90 per cent drop in operating profit in the April-June quarter, hit by a loss at its handset division as it struggles to keep up with rivals in the smartphones race.
LG has vowed to overtake Samsung Electronics as the second-biggest maker of handsets by 2012. It has about 10 per cent of global share compared with Samsung's 20 per cent.
LG said earlier this year that it was devoting 30 per cent of its mobile phone research and development labour force to working towards a breakthrough in smartphones, in which it has about 1 per cent of the global share. But it has been trailing Apple and local rival Samsung Electronics in the race to unveil compelling smartphones.
Samsung has rushed out its Galaxy S smartphone to compete with Apple's iPhone, but LG's plans have yet to gain traction.
"LG does not have a smartphone that defines its brand" said Ha Eun-mi, analyst at HI Investment and Securities in Seoul, speaking to Financial Times. "They jumped into the smartphone market very late, trying to catch up with competitors who started one or two years earlier"
LG's strategy was to compete for the luxury niche, including expensive "feature" phones such as the Prada, in conjunction with the fashion house. The Prada phones and later LG multimedia models lacked the iPhone's wide-ranging computer-style features.
The handset maker is counting heavily on the success of a smartphone, based on Google's Android operating system, that it is due to launch this quarter.
Im Jeong Jae, a fund manager at Shinhan BNP Paribas Asset Management, told Bloomberg the company needed to regain investors' confidence in its mobile phone business, but added that "the environment doesn?t seem too bright"
Based on story in ft.com
