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LG cuts its mobile phone sales forecasts

Still can't get the hang of smartphones
Thu Jul 07 2011, 15:20

CONSUMER ELECTRONICS MAKER LG has slashed its mobile phone sales targets following a lacklustre year in the smartphone market.

At the start of 2011, the Korean company LG and Nvidia CEO Jen-Hsun Huang proudly showed off the LG Optimus 2X at CES. However, apart from its dual-core processor the device was largely forgettable, and it seems that the Optimus 2X set the tone for LG's latest dose of disappointment. LG has cut its 2011 smartphone sales forecast to 24 million handsets from an original estimate of over 30 million. Worse still was its reduction in projected overall phone sales for the year, down from 150 million to 114 million.

LG is still the world's third largest phone maker, but it has largely failed to set the smartphone market on fire with its devices. To put LG's latest smartphone sales estimates into perspective, Samsung expects to have sold 19 million smartphones in the second quarter of 2011 alone.

Park Jong-seok, head of LG's handset division told journalists, "Our overall performance is gradually improving ... but it's difficult to give a precise prediction when our business will turn around due to a fast changing external market environment."

It's no surprise that LG has cut sales estimates after having been relatively unsuccessful. When consumers think of smartphones the brands that immediately come to mind are Apple, HTC and Samsung. Samsung in particular is expected to flog 60 million smartphones in 2011, and its success with products such as the Galaxy S range of devices is likely to hurt LG the most, as the two Korean firms have a very strong rivalry.

Reuters reports that LG expects to show a fifth straight quarter of financial losses in its handset division, although it is expecting losses to narrow.

LG's latest cut in its mobile phone sales forecasts clearly show that the firm needs to produce devices that stand out from the crowd, follow its rivals' lead and invest to increase awareness of its devices. If not, it could find itself compared more closely with Nokia than Samsung. µ


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