LG Raises 2010 Sales Target to $52 Bil.

Nam Yong, CEO of LG Electronics

LG Electronics expects its revenue to reach 59 trillion won (about $52.1 billion) this year, representing about a 10 percent increase from its projections for 2009.

It expects much of the growth to be generated by sales of consumer electronics and handsets.
In a news conference in Las Vegas, CEO Nam Yong also said the company will invest 3.6 trillion won this year, a 38 percent increase from the 2009 numbers.

Much of the money will be spent on research and development (R&D) for mobile devices, televisions, three-dimensional-related (3D) technologies and also in new business areas such as solar cells, he said.

However, Nam denied speculation that LG Electronics was bidding for Hynix Semiconductor, the troubled memory chipmaker that is currently looking for new ownership.

"The size of our investment is expected to increase dramatically from the 2.6 trillion won last year, as we are spending more to establish facilities for our nascent solar cell business and also on developing technologies for 'smart’ televisions, 3-D and renewable energy-related technologies. We will be hiring more than last year as well, with the focus on adding to our engineering talent,’’ Nam told reporters on the sidelines of the International Consumer Electronics Show (CES).

The creditors-turned-shareholders of Hynix, the world’s second-largest memory chip maker behind Samsung Electronics, is preparing a public auction for the company after the Hyosung Group dropped out as the preferred bidder late last year.

LG Electronics successfully exploited the softened competition during the economic turmoil of the past year, stepping up as the world’s No. 2 flat-screen television maker, trailing only bitter domestic rival Samsung Electronics, and also becoming the No. 3 handset vendor behind Nokia and Samsung.

Nam was confident about the company maintaining its growth trajectory in televisions and mobile devices this year, although he expects stronger competition from rivals in Japan and elsewhere as they prepare to uncoil and strike.

A priority for the company is to establish a meaningful presence in the market for smartphones, which provide larger margins than conventional handsets.

Although LG Electronics has been enjoying an expanding global presence in mobile phones, its share in the smartphone market is miniscule as the company has yet to offer a device intriguing enough to compete with the iPhones and Blackberries of the world.

Nam vowed to make efforts to fare better in the "smart wars,’’ such as improving content and user interface for its mobile devices and consumer electronics products, while identifying Apple as a role-model.

"The challenge for us is to be more attentive to users’ needs and adhere to more of their demands in our new products. We need our products to generate more value for our users than Apple does for its iPhone users. We need to do better with software and applications, which is where much of our new engineering talent will be dispatched this year,’’ Nam said.

"It was a tough time last year, but due to the struggles of the Japanese companies, the level of competition wasn’t that strong. Things will be more difficult this year, as the economic conditions haven’t improved dramatically, but the level of competition is expected to be much higher. The Japanese heavyweights appear to be much more aggressive, and our competitors in China clearly look more formidable than compared to previous years.’’

Nam predicted that 2010 would be the year that 3D television finally takes off, and assured that LG Electronics is fully on the bandwagon, looking to compete in the emerging markets for 3D televisions and projectors.

The company is also launching a new line of premium televisions, dubbed as "INFINIA,’’ and displayed some of its first products at the CES, including a light-emitting diode (LED) backlit liquid crystal display (LCD) model with a 480 hertz refresh rate, and an ``ultra slim’’ LED-backlit model that is just 6.9 millimeters thick.

While focusing on premium products in advanced markets such as North America and Europe, LG Electronics is looking to expand its market share with cheaper products for emerging markets such as China, India, Russia and Latin American countries.

The company is also looking to lay the foundation for solar cells and healthcare-related technology products this year and also renew its focus on business-to-business (B2B) opportunities, Nam said.

By Kim Tong-hyung, The Korea Times