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Thursday, January 04, 2007
Rhee So-eui
SEOUL: LG Electronics Inc. sees mobile phone sales rising 17 per cent in 2007 to around 75 million units, a source close to the firm said on Thursday, as analysts expect new models and a broader customer base to fuel gains.
South Korea-based LG, the world's fifth-biggest mobile phone maker in the third quarter of 2006, saw its market share decline last year as Motorola Inc.'s blockbuster RAZR and Sony Ericsson's Walkman music phones exploded in popularity.
"LG estimates 75 million is an achievable target," the source, who declined to be identified, told Reuters.
LG is expected to have sold about 64 million mobile phones last year, according to company sources and analysts, compared with an initial 70 million target it set at the beginning of 2006. The company has yet to unveil its 2007 handset sale target officially.
Analysts expect LG's handset sales this year to come at around 74-76 million handsets, with recent models such as the thin "Chocolate" and metal-body "Shine" promising solid results.
"LG now makes better-quality phones and can expand its market share in the GSM market," said S.R. Kwon, an analyst at Hyundai Securities, highlighting the firm's broadening customer base for third-generation mobile phones which now includes Vodafone and Cingular Wireless.
Kwon expects LG to sell 75.4 million mobile phones in 2007, up from an estimated 64.1 million in 2006.
Hutchison Whampoa Ltd. was LG's sole client for 3G phones until late 2006.
"Motorola's recent slowdown in sales, especially with its latest KRZR models, may give LG a chance to fight back," said Kevin Lee, an analyst at Woori Securities. "But Sony Ericsson's sales are booming, so it remains to be seen how much market share LG can gain."
LG in December replaced its chief executive, chief financial officer and the heads of the mobile phone and display businesses in a management reshuffle aimed at bringing back momentum.
Shares in LG, which has market value of about $9 billion, fell 38.4 per cent in 2006 against the wider market's 4 per cent gain as the company struggled with snowballing losses at flat-panel affiliate LG.Philips LCD Co. Ltd. and disappointing handset sales.
The stock has climbed 4.7 per cent so far in 2007 as investors bet on a turnaround for LG, which is also the world's top maker of plasma display screens and home-use air conditioners.
Source: Reuters
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