LG Elec says "carefully watching" Nokia

By Marie-France Han

SEOUL (Reuters) - LG Electronics is keeping a close eye on potential moves by top handset maker Nokia but is generally positive about the industry's environment this year, an executive said on Monday.

"We are carefully watching Nokia," Chang Ma, LG's vice president for marketing strategy told Reuters in an interview.

Shares in LG Electronics tumbled more than 8 percent on market talk that world No.1 mobile phone maker Nokia may cut its handset prices and re-enter South Korea in the second half of this year.

Shares in No.4 handset maker LG closed down 3.8 percent at 140,500 won after touching 130,500 won. Shares of bigger home rival Samsung Electronics, the world's No. 2 maker, closed down 3.96 percent at 679,000 won, underperforming a 1.5 percent fall in the wider market.

Ma said LG was also looking to seize any opportunities coming from the difficulties experienced at world No. 3 Motorola Inc and No. 5 Swedish-Japanese Sony Ericsson

While the company has not revised its yearly shipment target of 100 million units, Ma said his outlook for the rest of the year was positive.

"We see some risks coming from the economic slowdown, the rise of raw materials prices and the possibility of unexpected moves by competitors, but we will compensate these risk factors with our product portfolio and our marketing strength," Ma said.

LG sold a record 24.4 million phones in the traditionally weak first quarter and looks well on its way to pass its previously stated target of 100 million phones for the year.