LG aims to more than double smartphone shipments

LAS VEGAS, USA: South Korea's LG Electronics Inc aims to more than double smartphone shipments this year and will focus on expanding premium products to catch up with bigger rivals, an executive said on Thursday.

LG is the world's No.3 handset maker but the business is struggling with record losses and has lost out to Apple due to weak lineups and a rise in development and marketing costs to prop up faltering sales of low-priced phones.

"It'll be difficult to make a quick turnaround due to legacy products and higher marketing spending," Ma Chang-min, vice president and head of marketing for LG's mobile communications, told Reuters in an interview at the Consumer Electronics Show in Las Vegas.

"But we are now better prepared for competition as our products such as Optimus One have gained some traction in the market and our focus in 2011 will be expanding premium product offerings."

Ma said LG sold around 7 million smartphones last year and aimed to increase the volume by two to three times this year.

LG has made progress in its smartphone business over the past six months, selling nearly 3 million units of Optimus One since its October launch. The Android phone is LG's best-selling smartphone so far.

But the firm is not out of the woods yet due to a lack of premium models and higher spending for marketing and recruiting to boost high-end products attractive enough to challenge Apple's iPhone and Samsung's Galaxy S.

Due to its focus on low-end models, LG is the world's fifth-largest handset maker by revenue, although it is ranked third in terms of unit shipment, according to CLSA analysts.

It recently introduced premium models such as Optimus 2X, which uses Nvidia's Tegra 2 dual core microprocessor, and Optimus Black.

Optimus 2X is the world's first smartphone with a dual core chip processor, which boasts low power consumption, enables faster and smoother Web browsing and improves speed of multi-tasking between applications, compared with a single-core processor.

The 4-inch screen phone also has a 8 megapixel rear camera and a 1.3-megapixel front-facing camera for video conferencing.

"Our strategy for 2011 will be improving such premium offerings as Optimus 2X and Black and grow our smartphone portion in our portfolio to be in line with the market growth, which is estimated at around 30 percent this year," Ma said.

Smartphones currently account for around 10 percent of LG's handset shipments.

LG is considering using dual core chips for its next smartphone lineups to differentiate its offerings, Ma said.

Research firm IDC estimates global mobile phone market growth to slow to 6.4 percent this year to 1.4 billion units from last year's nearly 15 percent expansion. It sees smartphone shipments rising by 31.5 percent to 380.7 million units this year, accounting for 27 percent of the handset market.