LG Electronics Inc, Asia's second-largest mobile phone maker, said that its growth rate for handset shipments won't slow next year, bucking an industry trend.
LG's mobile-phone shipments, forecast to increase about 23 percent this year, will probably rise 25 percent next year, the company said in a conference call with analysts. The profit margin from cellphones, which averaged about 3 percent this year, may increase to "mid-to-high single-digits" next year, Anthony Moon, the company's head of investor relations, said during the call.
LG's predictions compare with those of market researcher IDC, which estimates industry shipments will slow to a 6 percent gain next year from 10 percent this year. After reporting its first loss from the mobile phone business during the second quarter, LG is betting upgraded manufacturing facilities and new models will help the company take market share from larger rivals such as Nokia Oyj and Samsung Electronics Co.
"The direction and prospect for the handset division is much better than it was six months ago," Moon said. "There is more confidence within the firm."
LG, which gets most of its handset sales from mobile-phone operators, is trying to increase sales by targeting more "open market" retail consumers, Moon said. That strategy will probably force the company to spend more on marketing, which now averages about 6 percent of sales, he said.
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