LG plans 10 more smartphones in 2010, leans on Nvidia for chips

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LG Electronics plans to release 10 more smartphones before year-end and is aiming to reach 5 million smartphone sales this year, a company executive said.  The statement indicates that the South Korean firm is taking its smartphone struggles seriously.

The company is going to ramp up its handset R&D budget by one-third and increase marketing, actions that will put a bind on handset margins, Chang Ma, vice president of marketing for LG's handset division, told Dow Jones Newswires. LG plans to make the majority of its smartphones run Google's Android platform, but also plans to support Microsoft's forthcoming Windows Phone 7.

LG still holds the No. 3 handset ranking, but its smartphone market share is tiny--1.2 percent in the second quarter, according to Gartner. LG's handset unit posted an operating loss of $101 million in the quarter, a dramatic reversal of the $524 million profit it recorded in the year-ago period.

To reverse those trends, LG is planning a major launch with its Optimus line of Android phones this fall. The company has not said whether it will partner with a U.S. carrier on the phones, but plans to release its flagship phone, the Optimus One, through 120 operators. Ma said the phone will be a "gateway" phone for first-time smartphone users.

"We think it's reasonable for us to provide this to people who hesitate to buy or don't have enough experience with smartphones," he said. "This is a clear answer to them."

In a bit of a coup, LG said it is using Nvidia's dual-core Tegra chipsets for its Optimus phones. So far, Nvidia has been eclipsed in the smartphone processor market by Qualcomm's (NASDAQ:QCOM) Snapdragon and Samsung's Hummingbird. 

For more:
- see this Dow Jones Newswires article (sub. req.)
- see this WSJ blog post (sub. req.)

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