LG developing smartphone for Google: source

Bloomberg and AFP, SINGAPORE

Fri, Oct 12, 2012 - Page 15

LG Electronics Inc is developing a Nexus smartphone for Google Inc, becoming the third manufacturer to build phones for the US company, according to a person with knowledge of the matter.

The device, to be unveiled this month, is based on LG’s Optimus G model, said the person, who declined to be identified because the project is not public.

For LG, its first Nexus project would deepen a partnership with Google as the Seoul-based company tries to compete with Samsung Electronics Co. Google has previously developed phones with Samsung and HTC Corp (宏達電) to help maintain the dominance of its mobile operating system against Apple Inc’s iPhone.

Jinny Lee, a Seoul-based spokeswoman for LG, and Shari Yoder Doherty, a spokeswoman for Google, declined to comment.

LG’s Optimus G, which went on sale in South Korea last month, has a 4.7-inch screen and runs on a processor made by Qualcomm Inc. It uses fourth-generation long term evolution (LTE) networks offering faster Internet connections.

Technology blogs, including BGR, have posted what they say are leaked photos of the new Nexus phone with LG’s logo.

LG’s mobile-phone division had an operating loss of 56.7 billion won (US$51 million) in the second quarter, compared with Samsung’s operating profit of 4.19 trillion won at its telecommunications business.

LG was No. 5 in global handset sales that quarter, while Samsung was No. 1, according to Gartner Inc.

Devices running Android controlled 64 percent of the smartphone market in the second quarter, compared with 19 percent for the iPhone, Gartner said.

Samsung has sold about 500,000 Nexus S phones in the US as of June 30, according to court documents filed in California as part of a patent dispute with Apple over devices, including the Nexus.

In related news, global telecoms operators are expected to have lost US$23 billion in SMS revenues by the end of this year as smartphone users shift to free messaging applications, an industry report said yesterday.

Technology research company Ovum forecast the losses would more than double to US$54 billion by 2016 as traditional SMS gives way to Internet-based platforms, such as WhatsApp.

This compares with estimated losses of US$8.7 billion in 2010 and US$13.9 billion last year.

“Social messaging is becoming more pervasive and operators are coming under increased pressure to drive revenues from the messaging component of their communications business,” said Neha Dharia, consumer telecoms analyst at Ovum. “Operators need to understand the impact of social messaging apps on consumer behavior, both in terms of changing communication patterns and the impact on SMS revenue, and offer services to suit.”

Ovum cited the increasing popularity of WhatsApp, which allows smartphone owners to exchange messages for free using wireless Internet links, bypassing SMS gateways that charge users per message or for a monthly quota.

“Ovum believes this level of growth will continue as smartphone and mobile broadband penetration increases and expects smaller players such as ‘textPlus,’ ‘Pinterest’ and ‘fring’ to cause further disruption in the messaging space,” the report said.

Urging telecoms operators to innovate, Ovum said the increase in the number of players offering social messaging services is not a short-term trend, but a sign of a “shift in communication patterns.”

Text messaging started as a way to use spare telecoms capacity, but became a key cash generator for operators, while offering users a cheap way to keep in touch with friends and family without having to spend on telephone calls.

Dharia said yesterday that SMS contributed 49 percent of non-voice revenues for telecoms companies globally last year, but that is expected to fall to 45 percent this year and to 35 percent by 2016.