LG Electronics expects to sell 80 million handsets, 35 million smartphones and 8 million LTE smartphones in 2012, according to a senior LG executive. The overall handset sales would represent a drop from LG's mark in 2011, but the company expects to shift its focus toward higher-end, more profitable smartphones this year.
In an interview with Korea Times, Park Jong-seok, head of the company's handset division, laid out the sales targets for this year as well as the company's strategic vision. According to research firm IDC, LG shipped 88.1 million handsets in 2011, down from 116.7 million in all of 2010.
LG has been signaling for months that it intends to shift to LTE smartphones with high-end specs to regain its footing, especially in the higher end of the market. The company's handset unit turned a profit in the first quarter--its first operating profit in six quarters. "I think LTE, high-definition and quad-core will be the key words this year. With fine-tuned technology and strategies, LG will recover our once-lost brand awareness,'' Park said.
LG is banking on some high-end devices to give it momentum in the first half of the year. The company recently introduced the high-end Optimus 4X HD, which sports a quad-core Nvidia Tegra 3 processor. The company also announced the Optimus Vu, a 5-inch device in the "phablet" category to compete with Samsung's Galaxy Note, as well as the Optimus 3D Max, a phone with a 3D screen. LG is pouring research and development money into its handset business and focusing on a new design philosophy called "L-Style."
Some analysts see the new portfolio as an encouraging sign that LG is on the right track. "Thanks to an increased portion of smartphone sales, the average selling price (ASP)--the barometer to gauge profitability--is rising, helping LG's handset division see an improvement,'' Park Kang-ho, an analyst at Daishin Securities, told Korea Times.
Still, there are worries that LG will not be able to differentiate itself enough from larger smartphone competitors, including Apple (NASDAQ:AAPL) and Samsung. "2012 will feature more smartphones from LG, especially LTE-powered models, but the competition has similar smartphone strategies," IDC analysts wrote of LG in early February.
- see this Korea Times article
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