Reuters top ten news stories delivered to your inbox each day.
You are here:
Business & Finance
The Great Debate
Do More With Reuters
Make Reuters My Homepage
Support (Customer Zone)
About Thomson Reuters
LG to grow market share with cheaper phones
Sun Feb 15, 2009 9:38pm EST
Email | Print |
| Reprints | Single Page
By Rhee So-eui
SEOUL (Reuters) - LG Electronics Inc, the world's No.3 mobile phone maker, aims to increase its global market share to at least 10 percent this year and boost low-cost phone sales, the head of its handset business said.
As shrinking consumer demand hits the mobile industry, LG expects deteriorating profits this year, but still targets a high single-digit percent profit margin on mobiles, against 11 percent in 2008, said Skott Ahn, President and CEO of Mobile Communications at LG.
"Developed markets will definitely suffer some contraction, but there's a chance for growth in first-time buyers in emerging markets," Ahn said.
He said LG was aiming to sell more than 100 million handsets this year. It sold 100.7 million mobiles in 2008, beating Motorola Inc by a slight margin to rank behind Nokia and Samsung Electronics Co Ltd, and claim about 8.5 percent of the global market.
"We will be able to meet our market share goal (of 10 percent) if we can maintain our sales volume at last year's level," Ahn said, adding the targets assumed the global mobile phone market would decline about 10 percent in 2009.
The comments were made at a news conference in Seoul ahead of the Mobile World Congress (MWC) in Barcelona.
Samsung, which is also attending the mobile fair, reiterated at a press briefing that it aimed to sell more than 200 million handsets this year, pushing up its global market share to at least 20 percent from about 16 percent in 2008.
Samsung also hopes to post a double-digit percent operating profit margin at its telecom business, spokesman Ahn Jae-kwang said. The company posted a 9 percent profit margin in 2008.
Strategy Analytics forecast the global cellphone market to shrink by 9 percent in 2009, its first decline since 2001. The outlook is especially grim for the first half as shipments slow after year-end holidays in developed markets.
"A decline in profit margins looks inevitable, although smartphone sales can make up for some of the revenue shortfalls caused by selling more cheap phones," said Kim Ik-sang, analyst at HI Investment & Securities in Seoul.
Kim expects Samsung and LG to post 6-7 percent profit margins on their mobile phone businesses this year. "In the downturn, the best they can do is minimize handset price falls and cement their market share."
LG will also have to focus more on low-end phones, priced at $100 and below, to grow in the shrinking overall market. Ahn said the South Korean firm planned to boost sales of low-cost phones by around a fifth this year.
In 2008, high-end phones, sold at $200 or higher, represented about 80 percent of LG's handset revenue.
However, LG will stay away from the very low-end category of $20 or lower handsets, and offer affordable mass-market models that still provide the feel of premium phones, Ahn added.
"We are still in the stage of building up our brand in emerging markets," he said. "And we still want to avoid price competition." Continued...
View article on single page
Google to offer paid smartphone apps in Apple challenge
Video: G7 crisis talks
Barbie turns heads on New York's catwalk at 50
One year after secession, Kosovo remains fragile
More Technology News
Sony Ericsson unveils 2 phones, video service
Mobile data demand up despite economy: survey
Adobe to make video on smartphones as on PCs
Sirius creditors threaten to oust CEO: report
Google to offer paid smartphone apps in Apple challenge
More Technology News...
A selection of our best photos from the past 24 hours. Slideshow
Most Popular on Reuters
Obama drops "car czar" idea
Oscar voting rules create uneven playing field
British singer M.I.A. gives birth to boy
Iraqis open arms to romance as violence fades | Video
Deals of the day -- mergers and acquisitions
White House dampens stimulus expectations
Japan economy in biggest dive since 1974
Chavez wins re-election chance in economy's shadow | Video
Cash-rich tech companies move carefully in downturn
GM considering Chapter 11 filing, new company: report
Most Popular Articles RSS Feed
Venezuela votes on Chavez referendum
G7 crisis talks
Khmer Rouge trials set to start
Deadly blaze hits Russian hostel
Piggy-back ride for your Valentine
Lawsuit threat over Australia fire
Afghan operation risks Soviet fate
Iraq suicide bomb kills pilgrims
Tight security for Kerbala gathering
Can love conquer a recession?
Most Popular Videos RSS Feed
the great debate
Harness the genie of citizen engagement
If President Obama really wants to change America, he should use the Internet to brainstorm all Americans. Commentary
Follow The Great Debate on Twitter @reutersgr8db8
The global destination for corporate leaders, deal-makers and innovators
Knowledge to Act
Help and Contact Us |
Advertise With Us |
Interactive TV |
Reuters in Second Life |
Site Index |
Thomson Reuters Corporate:
Professional Products |
Professional Products Support |
About Thomson Reuters |
Latin America |
United Kingdom |
Thomson Reuters is the world's largest international multimedia news agency, providing investing news, world news, business news, technology news, headline news, small business news, news alerts, personal finance, stock market, and mutual funds information available on Reuters.com, video, mobile, and interactive television platforms. Thomson Reuters journalists are subject to an Editorial Handbook which requires fair presentation and disclosure of relevant interests.
NYSE and AMEX quotes delayed by at least 20 minutes. Nasdaq delayed by at least 15 minutes. For a complete list of exchanges and delays, please click here.