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2010/01/07 15:50 KST
LG Electronics looks to Android in competition with smartphone rivals: CEO

By Lee Youkyung
SEOUL/LAS VEGAS, Jan. 7 (Yonhap) -- Half of all new smartphones released this year by LG Electronics Inc. will be based on Google Inc.'s Android operating system, the South Korean company's top executive said Thursday.

   LG Electronics has remained the world's third-largest handset maker since 2008, when it overtook Motorola Inc. and Sony Ericsson Mobile Communications Ltd. But its weak lineup of smartphones has stoked concern over whether the company will maintain its position in the fast-changing global phone market.

   Nam Yong, LG's chief executive officer, said the firm's smartphones will focus on Android, an operating system for the mobile devices provided by Google. Smartphones, which allow access to wireless Internet, differ from traditional cell phones in that they require an operating system.

   "We will have smartphones running on Windows Mobile, but about 50 percent of our smartphone models will run on Android," Nam told reporters at a trade show in Las Vegas.

   The company did not confirm the release date or the number of models it plans to launch this year.
LG will also turn to Google for content used with its smartphones, Nam added.

   "The operating system itself will not guarantee competitiveness in mobile content," he said. "For now, Google's content seems to be the only alternative."
Google, the world's largest search engine operator, also offers general office and email functions by accessing its server without having to download programs. The process, known as cloud computing, allows users to store, edit and retrieve files in Google's server from any device with Internet access and is expected to be adopted in smartphones.

   Analysts said LG Electronics' handset division is likely to see a decreasing profit in 2010 as LG still lags in the fast-growing and highly profitable smartphone sector.

   "For handsets, despite shipment growth, we continue to expect smartphones to pose challenges," said Sean Kim, an analyst at UBS Investment Research, in a report dated Tuesday. He forecast that operating profit for LG's handset division will go down 28 percent on year in 2010.

   LG's top executive acknowledged the challenge from growing smartphone models, such as Apple Inc's iPhone and Research In Motion Ltd.'s BlackBerry.

   "Handset markets will be polarized between low-end phones and smartphones in the future," Nam said. "We have a sense of crisis that if we don't prepare within the year, we could be left out of the market."