July 7, 2011 / 5:02 AM / 8 years ago

LG sees H2 smartphone sales up 40 pct, cuts 2011 handset targets

SEOUL, July 7 (Reuters) - LG Electronics Inc , the world’s No.3 handset maker, expected its smartphone sales to rise by around 40 percent in the second half to 14 million units from the previous half, as it introduced Optimus 3D on Thursday in South Korea in its latest push to turn around the loss-making handset business.

But it lowered its overall handset sales target for 2011 by a quarter to 114 million units from 150 million units made earlier this year, as demand for its mainstay feature phones drop due to customers switching to smartphones.

“Our overall performance is gradually improving...but it’s difficult to give a precise prediction when our business will turn around due to a fast changing external market environment,” Park Jong-seok, head of LG’s handset division, told reporters.

Park said it aimed to sell at least 24 million units of smartphones this year after selling slightly more than 10 million smartphones in the first half. Overall handset sales are seen rising by 30 percent in the second half as it sold nearly 50 million handsets in the first half.

LG is likely to report a fifth-consecutive quarterly loss from handset sales in the April-June quarter, as it fails to introduce compelling products to challenge Apple’s iPhone and Samsung’s Galaxy S, and due to weakening demand growth for feature-packed handsets.

But it has been gradually narrowing losses and its overall performance is on a firm recovery path, largely helped by solid demand for such models as Optimus 2X and Optimus Black.

Analysts expect second-quarter losses from handset sales to narrow to around 70-90 billion won from 120 billion won loss a year ago, when it reports quarterly results later this month.

Optimus 3D, introduced on Thursday, runs on Google’s Android platform and Texas Instruments Inc’s OMAP mobile processors. It will be available through South Korea’s top mobile carrier SK Telecom .

LG bets the new smartphone with 3D function will help it expand into the portable gaming hardware market, which is dominated by the likes of Japan’s Nintendo and Sony Corp .

Optimus 3D, which has 4.3-inch display and two cameras, comes with preloaded 3D games made by mobile video game specialist Gameloft SA , and LG aims to sell 1.7 million units of the model this year.

In the second half, LG’s new product line-ups will include LTE (long-term evolution) phones and smartphones with high definition display, Park said. (Reporting by Miyoung Kim; Editing by Jacqueline Wong)

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