LG Engineers Mobile Comeback - Wall Street Journal

Another day, another smartphone. This time, it's a new smartphone from South Korea's LG Electronics Inc., the consumer electronics firm that's trying to make a comeback in mobile phones. LG is betting big on smartphones with its new LG G2 model, hoping to override looming concerns over slowing momentum in the smartphone market  that has eroded the market values of both rivals Samsung Electronics Co. and Apple Inc., the top smartphone makers in the world. "We're going to win back  double-digit market share as soon as possible," Kim Ki-wan, LG's global marketing officer said, without giving a specific timeframe. The LG G2 comes with a 5.2-inch liquid-crystal-display, high-definition screen, a 13-megapixel camera and a 2.26 gigahertz quad-core processor.  One interesting tweak the company has made on the phone is placing the so-called 'home button' on the back of the device.  The phones will be available first in South Korea this month and will be gradually rolled out in other countries starting next month. Mr. Kim may have good reasons for being so confident, as recent data from market research firms show LG has been gaining market share globally, while the combined share of Samsung and Apple has been shrinking. In the second quarter, LG shipped 12.1 million smartphones, more than doubling from 5.8 million shipments a year earlier. It grabbed a 5.3% share, increasing its presence from 3.7% last year according to market research firm Strategy Analytics. Company executives say it has a long way to go before it restores the glory it once had as a top mobile handset maker. Though LG had been a key mobile player until a few years ago with an estimated 10% share in 2009, the South Korean company quickly lost ground with the advent of smartphones, struggling to produce high-end phones in a timely fashion. "Of course we want big revenues and profits. But those are results rather than a target. The primary target with the launch of G2 is in planting the image among consumers that LG has regained product leadership," Mr. Kim said. LG is certainly trying hard to better market its product, throwing a launch event in New York, like Samsung did in March with its  Galaxy S4. While lavish marketing events may help in shaping a better brand image for LG and its products, analysts say it will have to pay dues with heavy marketing expenses eating into its profit margins. "We see a limitation in the magnitude of profitability improvement as the industry ASP (average selling price) drops and LG Electronics' smartphone mix is skewed toward the fiercely competitive low-end," Sanford C. Bernstein analyst Mark Newman wrote in a research note this week. But he added that the company's shipment growth is currently faster than the overall industry growth. "We expect its global market share to stabilize at 5.25% in the medium term," said Mr. Newman. via Technology - Google News http://news.google.com/news/url?sa=t&fd=R&usg=AFQjCNFfgZWH4zuFDZSUttcbj74bhA8Bbw&url=http://stream.wsj.com/story/latest-headlines/SS-2-63399/SS-2-296894/

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