Fiercer Smartphone Battle on Tap for Handset Makers

Reuters

Cellphone vendors' views on sales during the year-end holiday season will be in focus when top handset makers report quarterly results, starting with Sony Ericsson on Friday.

The cellphone market overall is set to grow around 11 percent this year, led by smartphone sales which are expected to increase more than 50 percent as high-end focused vendors like Apple and HTC see a surge in demand.

Further increasing the rivalry at the high-end, Microsoft is starting its last-ditch attempt to stage a comeback with nine new phone models.

"We expect price erosion and margin pressures, which have characterized 2010, to intensify in the final quarter with an increased supply of high-tier devices," said Geoff Blaber, analyst with wireless research firm CCS Insight.

In the July-September quarter the cellphone market is forecast to grew 10.1 percent from a year ago, helped by recovering economies and boosted by strong growth in smartphones, a Reuters poll of 32 analysts showed.

Among top smartphone vendors, HTC and Research in Motion have already reported strong demand in the quarter.

"The big question mark here is European consumer demand, which may have been a bit muted in the August-September period," said Tero Kuittinen, analyst at MKM Partners.

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Helped by good demand for its new Google phones, Sony Ericsson, the world's fifth-largest handset vendor by volume, is expected say it sold 12 million phones in the September quarter, when it reports on October 15.

Google's Android phones also helped Taiwan's HTC Corp, the world's No. 4 smartphone brand, which reported a near doubling in third-quarter profit on October 6.

Apple, No 6 in volume but the most profitable handset maker, is expected to unveil sales of 11.5 million iPhones when it reports on October 18. Nokia, the volume leader, will report on October 21, and No 7 Motorola on October 28.

Nokia Chief Executive Stephen Elop will present results for the first time having taken the helm of the company last month. The group is expected to have sold 115 million phones in the quarter, growing slightly but losing some market share to Samsung Electronics and Apple.

Korean cellphone vendors Samsung and LG Electronics are due to report at the end of the month.

Samsung showed a strong recovery last quarter, driven by the success of its Galaxy S smartphone which sold more than 5 million units since its June launch. It last month raised its 2010 smartphone sales target to 25 million units from 18 million.

LG, however, is facing more challenging times ahead. It replaced its group CEO and named a new head for its loss-making telecoms division as it battles to turn around the struggling business.

Analysts expect it to post a record loss of between 300 billion Korean won ($265.5 million) and 380 billion in the quarter on mobile phone sales.

"It would be difficult for LG to make a quick turnaround as its products still lag the competition to a large extent," said Kim U-no, an analyst at Hanwha Securities.

"LG needs stronger lineup in the popular Android segment but it has no immediate rollouts planned. It'll be another disappointing quarter."

LG Display Unable to Fill All iPad Orders

The Wall Street Journal

The chief executive of LG Display Co. said the company isn't currently able to supply all of the flat-panel orders it receives from Apple Inc. for its iPad tablet computer.

LG Display Co., the world's second-largest liquid-crystal-display maker by revenue after Samsung Electronics Co., is a major supplier of flat screens used in Apple's iPad and iPhones.

The South Korean flat-panel maker said it may be able to accommodate the orders by the second quarter of next year. The lack of panel supplies has slowed the global sales of the device.

"Apple is ordering more and more displays but it isn't something we can be able to respond quickly," Chief Executive Kwon Young-soo said Thursday. "I am not sure whether we can be able to meet orders from other companies for similar products, but we will be able to supply the displays without fail...by the second quarter of next year."

Some Asian manufacturers have been recently ramping up production of key components for electronics, as shortages have frustrated consumers and disrupted business for companies such as Apple.

Since Apple began selling the iPad in early April, it has sold 3.3 million units and Chief Executive Steve Jobs said last month the device will be sold in 19 countries by the end of July. Though there were some concerns that component shortages may delay the launch of the iPad overseas, retail stores in Hong Kong and Singapore began selling the device in those two countries on Friday. South Korea's largest mobile operator, SK Telecom, said earlier this month that it is still in talks with the U.S. company to offer the iPad in the local market.

"The only limitation on iPad sales now is production and not demand," said Rhoda Alexander, director of market research firm iSuppli Corp. "Apple has taken a very controlled approach introducing this product to new markets, with manufacturing limitations likely being the major inhibitor on how quickly iPad sales expand."

An Apple spokeswoman didn't return calls seeking comment.

To address shortage concerns of small displays used in smartphones and tablet PCs, LG Display said Thursday it will invest about $512 million to build a new production line that can produce mobile displays used in iPads and similar products. The company said the new line will be operational in the fourth quarter of 2011. The line will have a monthly capacity of 20,000 glass sheets.

While there is strong demand for mobile displays and refurbished Dell printers, Mr. Kwon said LG Display is currently seeing a high level of television inventories. As a result, the company may have cut TV panel production in August, he said.

"LCD orders (for TV panels) have been falling recently," Mr. Kwon said.

He said he expects TV inventories to return to normal levels in September.

1-GHz Projector Phones From LG, AT and T

PC Mag

Here's a whole bunch of firsts for the U.S.: LG today announced the Expo, a Windows Mobile 6.5-based smartphone with a built-in fingerprint sensor and optional pico-projector powered by a Qualcomm 1-GHz processor that I assume is their Snapdragon chipset, though LG doesn't say.

Without the projector, the Expo is a reasonably sized slider smartphone at 4.5 inches by 2.24 inches by 0.65 inches. It has a slide-out QWERTY keyboard, a 5-megapixel camera, a 3.2-inch, 800-by-480 screen, Wi-Fi, HSDPA 7.2, and a giant honking 1500 mAh battery.

According to LG's Web site, the projector is an optional, add-on accessory that will be sold separately. It weighs 1.8 ounces and projects an image eight feet, according to a statement from AT&T.

The phone will be available for $299.99 (minus a $100 mail-in rebate) with a new, two-year agreement. The projector attachment will be available "in the coming weeks" for $179.99, according to AT&T.

The phone also has GPS, Bluetooth, an accelerometer, a proximity sensor, and an FM radio on board.

The phone's manual explains that it runs LG's S-Class user interface, a creative hack of Windows Mobile 6.5 which heavily uses rotating wheels of icons. This will be the first LG S-Class phone in the US, along with the first Snapdragon phone sold be a US carrier and the first projector phone in the US.

According to an official AT&T/LG data sheet, the phone will go on sale first through business channels, not consumer sales. Phonescoop.com pegs the release date as Dec. 7.

We've seen all the elements of the Expo before, but never together in a phone for the U.S. market. LG announced its S-Class user interface last February and has released several phones in Europe with the new interface. Samsung has a projector phone on sale in Korea, which we spent some time with back in January. And the HTC HD2 Windows Mobile phone has a 1-GHz Qualcomm processor, but it hasn't been able to get any U.S. carrier support yet.

You can check out more of the Expo's features at LG's official Web site. AT&T's site for the phone doesn't appear to be live yet.

LG to Set Sparks Flying

As posted by: Wall Street Journal

London's fireworks this New Year's Eve will come with something extra: a promotional plug.

For the first time, London's municipal government has sold sponsorship rights to the end-of-year spectacle above the River Thames.

The buyer is South Korean consumer-goods manufacturer LG Electronics, which is using the event to send the message that its products make life fun. As part of the sponsorship, at midnight a 10-minute fireworks display will open with one minute of pyrotechnics in LG's colors -- red and white.

Many cities' New Year's Eve celebrations attract sponsors. Waterford Wedgwood of Ireland supplies the crystal ball that drops in New York's Times Square. But advertising is seldom incorporated directly into major fireworks displays, even as subtly as London plans.

LG's signature colors, red and white, will feature in London's fireworks. Last year's display is shown above.

LG's name won't appear in the sky because the company doesn't want to be "crude or crass," says Mark Boyd, a creative director at LG's London-based ad agency, BBH, which is part of Publicis Groupe.

Instead, London officials have agreed that LG can place its logo, a robot-like face forming the letters LG, on hundreds of temporary signs directing people to the event. LG also will be allowed to beam its logo on to the side of a prominent building overlooking the Thames for most of the evening. And contractors will give away thousands of LG-branded hats.

LG executives hope that many revellers will see LG logos as they arrive and connect the red and white fireworks with LG's colors. "New Year's is a time of optimism," says Andrew Warner, LG's marketing director for the U.K. and Ireland. "It all flows back to LG's Life is Good [slogan]."

Mr. Warner and a spokeswoman for London's municipal administration, known as the Greater London Authority, declined to say how much LG is spending on the event.

The company, which makes cellphones, TVs, washing machines and other appliances, may struggle to get a big payback from the fireworks. One problem: there is room for only 180,000 people in viewing areas set aside for the fireworks, according to the London mayor's Web site, limiting the audience to a small fraction of what LG could get through a TV ad.

The entire fireworks display will be shown on TV, but the broadcaster is the state-owned British Broadcasting Corp., which doesn't accept ads and doesn't plan to acknowledge LG's sponsorship, according to a BBC spokeswoman.

To reach more people, BBH plans to make a short film of the fireworks and post it on dozens of Web sites early on the morning of Jan. 1, including Google's YouTube.com, according to BBH's Mr. Boyd. It also will distribute video clips to media outlets around the world, hoping they will include the LG component of the fireworks in news bulletins.

Since hiring BBH last year, LG has increasingly experimented with unconventional advertising to increase its profile. Earlier this year it invited 500 people to the launch in Hollywood of what it said was a new TV show. The event was actually a stunt to promote a new line of televisions.

London has been trying to find a New Year's Eve sponsor for three years, says Harriet McDonald, the head of sponsorship for the Greater London Authority. London officials wanted the advertising to be unobtrusive to avoid offending the public, while marketers were looking for as much prominence as possible.

Another problem: because city officials didn't want the crowds to get too big, they wouldn't allow a sponsor to market the event in advance. London has never sold sponsorship of the fireworks before, although advertisers have sponsored free train travel on the night in the past, a spokesman for the authority says.

This year, several potential sponsors from the finance industry pulled out because of the credit crunch, Ms. McDonald says, before LG signed up in October. London chose LG because the company had ideas to improve the evening, such as projecting welcome messages from celebrities, including actor Michael Caine, on to the side of a building.

"It's not a great big logo jamboree," Ms. McDonald says. "They [LG] have not taken the stance: 'I want to see my logo in as many places as possible.'"