SEOUL, KOREA --- You can't keep a good company down. Not that LG Electronics has ever been down, but Samsung's Galaxy line of phones were a pretty big hit in 2010. LG is hitting back though with the long-term effects of its patent portfolio, showing a 300% expansion in the smart phone market compared to last year’s 3rd quarter, signaling the return of one of the top mobile phone manufacturers in the world. According to last September’s report from Jeffereies & Co., LG Electronics owns 23% of the LTE patents around the world which adds up to around $8 billion, the top in the market. LG Electronics’s upper hand in patent values was clearly shown last October following the release of Optimus LTE in Korea, allowing us to get a glimpse of the status LG Electronics is expected to rise to in the world LTE market.
LG Electronics has shown surprising growth in the smart phone market, and is displaying signs of success in their business overhaul. According to the US market research institute Strategy Analytics, LG Electronics sold over 4.4 million phones around the world in this year’s 3rd quarter, setting a record of 300% growth compared to last year’s 3rd quarter sales of 1.1 million units.
This is the biggest growth amongst mobile phone manufacturers all around the world, with Samsung Electronics following behind with a 276% growth since last year’s 3rd quarter. This result came about through the release of Optimus 2X early this year followed by releases of distinct premium products such as the world’s brightest Optimus Black, and the high-end 3D phone Optimus 3D. Experts believe that their new policy of aggressively expanding into the smart phone market has paid off for LG Electronics.
In addition, according to research from US investment company Jeffereies & Co., LG Electronics has gained higher ground in the rapidly growing LTE market after being evaluated as having the most LTE patents in the world.
Optimus LTE Key to Success
LG Optimus LTE is the world’s first mobile device to offer 4G connectivity with the highest resolution IPS display available on a smartphone. Developed in close collaboration with sister company LG Display, Optimus LTE features a striking 4.5–inch True HD IPS display, which offers advanced resolution, brightness and clarity and shows colors in their most natural tones, as they were meant to be seen.
Optimus LTE also delivers enhanced performance with 1.5 GHz dual-core processor, running on the Android 2.3 Gingerbread OS platform. With a large 1,830 mAh battery, Optimus LTE is perfectly suited for multimedia usage. In addition, the device enables content sharing seamlessly through HDMI (High Definition Multimedia Interface) and DLNA (Digital Living Network Alliance).
“LG Optimus LTE is the first smartphone in Korea to offer vivid and clear HD content on a 4G network,” said Dr. Jong-seok Park, President and CEO of LG Electronics Mobile Communications Company. “Our goal is to be a leading player in LTE devices by continuously offering best-in-class products based on our LTE patents and know-how.”
It was released through SK Telecom and LG U+ in Korea last month and sold over 150,000 units in a month allowing it to rise to LTE stardom. Optimus LTE is scheduled for release in Canada this month followed by releases in the US and Japan. As the next generation mobile technology LTE market expands all around the world, LG Electronics’ growth in the smart phone sector is expected to accelerate.
In addition, LG Electronics' Optimus LTE White, released in Korea recently, is receiving good reviews from female consumers and younger generations alike and is expected to contribute to the acceleration of sales growth.
Taking Market by Storm
How was Optimus LTE able to take the market by storm Reports indicate that LG Electronics' technology shown by the world’s top number of LTE patents as well as the True HD IPS display, 1.5Ghz dual core CPU is maximizing customers satisfaction.
According to Forbes, as of September LG Electronics retains the most number of LTE patents in the world at 23% and this value is estimated to be $7.9 billion (based on current exchange rates, roughly 9.4 trillion won) which is the top in the industry. LG Electronics started leading the world’s LTE technology starting with the development of the world’s first LTE chip in 2008.
At the end of last year, LG Electronics supplied LTE modems to North American telecommunication firms AT&T and Verizon Wireless as well as Japan’s NTT Docomo. Also this May LG Electronics released the first LTE smart phone with the LTE chip Revolution onboard in the North American market, receiving positive reviews.
LG Electronics has continued to spend over 100 billion won since 2007 with over 250 research staff working on the LTE standard which was completed in December 2009. Even as rival companies began research on WiMAX, another 4G technology, LG Electronics continued to focus on LTE.
LG Electronics plans to increase its patent-related professional workforce by over 30% until 2013, strengthening their patent management. Even in regions such as the US, China and Europe where patent competition is fierce LG Electronics plans to reinforce their professional workforce and train existing personnel to strengthen their potential.
“We will of course research more potential LTE technology, but we will also expand into other mobile devices that will utilize this technology to strengthen our lead in the market.” Explained an unnamed LG Electronics official.
Head to Head with Samsung's Galaxy Series
The Galaxy S2 is currently the best-selling LTE smartphone in Korea. That phone has a 1.5 Ghz dual-core CPU, a 4.5-inch super AMOLED Plus display, an 8-megapixel camera in the back, a 2-megapixel camera in the front, 1 GB of RAM, and 1080p record and playback capability on the Android 2.3 Gingerbread platform. The Galaxy S2 HD LTE is supposed to be launching sometime around now, and will offer slightly bigger numbers all around.
The Optimus LTE sports the same 1.5 Ghz Dual-core chipset, the same 8 megapixel camera on the back, and the same 1GB of RAM. While the Galaxy S2 has a 1.5MP camera in the front, the Optimus LTE only has 1.3 megapixels, not much of a difference. The screen is the same size as well, 4.5 inches, but the Optimus LTE offers a True HD IPS Display, which comes at a resolution of 1280x720, which sounds like a computer monitor's resolution. This is the same size but better resolution than the Galaxy S2, which is a more traditional 800x480, although it does brag to being AMOLED. Whether True HD IPS Display is better or worse than AMOLED remains to be seen. Also, the Galaxy S2 HD LTE is coming out with a similar resolution to LG's latest offering at 1280x720 pixels. Showing how close the two phones are in dimensions, the Galaxy S2 HD LTE will be 140 grams, while the Optimus LTE will be 135 grams. Stiff competition indeed!
Offering First Class LTE
LG U+ held a press conference last weekend at Jeju Island, showing their network/service/terminal strategy for the best LTE businesses around the world. With the 4th generation LTE technology in the forefront, they plan to unveil a new business model that would propel LG U+ into the world market through the world’s first international network and revolutionary services.
“We have stayed at 3rd place for the last 10 years.” Claimed LG U+ Vice President Lee Sang Chul. “However, the atmosphere will certainly change for 4th generation LTE.” He emphasized the breaking of the cycle of poverty and the willpower to raise LG U+ into the top of not only the domestic market, but the international market in the LTE market. The cycle of poverty is an expression given to LG U+ during the frequency auction last August where LG U+ was evaluated as the weakest business. LG U+ was able to receive the golden frequency of 2.1 GHz without bidding, setting the base for a new LG U+.
“In just 4 months, LTE will be available even in mountains and valleys. Within the year all major cities in Korea will be connected via LTE network. Next March, 100% of the population will have access to LTE, creating the world’s first true national network. Even at Yeon Pyong Island and the peak of Mt. Seol Ak LTE services will be available. LG U+ is the only network provider in the world that can boast a 100% connection network,” explained Vice President Lee. “The LTE network will create an all-IP atmosphere that will revolutionize the meaning of communication services.”
LG U+ proclaimed to create an All-IP based FAST (First All-IP Seamless Total network) network that is a convergence of mobile phone, Wi-Fi and high-speed internet.
They claim that they have not have lost their ambition of throwing away the ‘clothesline business’ (network infrastructure) to introduce a whole new business model. “Until now the business model of the communications industry was providing contents and services to consumers through networks.” Vice President Lee also claimed that the communications industry met crisis due to ‘Kim Sun Dal’ style services such as Apple and Google’s direct content offering to consumers. “I felt that staying in the network market would bankrupt me.” Vice President Lee continued. “We will show the world a new model in the eye of the storm.”
FAST is a 100Mbps class wired/wireless network that converges different IP based networks together that processes voice, data and video. LTE national network construction will be pulled from later next year to March for the All-IP network.
Once the network is built next March, LG will be the first network provider to own a national network in the world. This is around a month faster that SK Telecom who started services around the same time, who claim that they will be ready by April next year.
LG U+ explained that “We will open a new age of communications through a consumer centered convergence service that processes voice, data and video as packets.” During the end of the year networks will be built in 84 cities and all highways and will be expanded to encompass all provinces and towns by next March. Also new equipment with two antennae will be installed so that the maximum speed of 75Mbps can be reached anywhere.
Not only that, the first VoLTE service based on the All-IP national network will be installed as well. VoLTE is short for Voice over LTE, which provides voice services in LTE systems through VoIP. VoLTE phones that provide voice and data as packet will be released and serviced in the second of next year. According to this, the original circuit based mobile communications services will change into packet based systems, creating the third mobile revolution following analogue and digital mobile communications and changes in pricing.
Services will be renovated as well. LG U+ plans to release voice/data joint services, cloud based N screen services and M2M services for a completely new dimension in high quality service. For this LG decided to complete a road map for communications, media, M2M, Lifeweb and cloud platforms in the first half of next year. They also plan to release cross platforms that combines these platforms together.
Devices, which was considered as LG’s weakness, is also planned for renovation. Next month, starting with Samsung’s Galaxy Note a number of LTE devices including Samsung and LG smartpads will be released. Next year over 20 devices will be released, and 80% of them will support LTE. In addition, competitive popular smart phones from overseas manufacturers will also be sourced as well. According to a statistics report from LG U+, LTE smart phone subscribers have risen to 270,000 members, something the call an LTE boom.
Currently LG U+ is retailing LG ‘Optimus LTE’, which boasts 4.5 IPS True HD display (1280x720), 1.5Ghz dual core CPU, Android OS 2.3 (Gingerbread) and Samsung’s ‘Galaxy S II HD LTE(SHV-E120L)’ which supports 4.65 HD super AMOLED (1280x720), 1.5Ghz dual core CPU and Android OS 2.3.
Considering weekend subscriptions and daily sales, over 60,000 new subscribers are expected to jump onto LG U+ 4G LTE bandwagon by the 31st. By devices, LG’s Optimus LTE is expected to sell 50,000 units while Galaxy S II HD LTE, which was released last weekend, is expected to sell over 10,000 units in 3 days.
Subscribers by region was around even, with 53% of subscribers in the Seoul/Capital Area. This can be due to LT U+ providing 4G LTE services to 16 cities around Seoul and the 6 main cities in the country. Over 95% of subscribers chose the LTE62 subscription.
LG U+ is expected to gather more than 500,000 subscribers by the end of the year with 1 new LTE smart phone and 2 LTE Tablet PCs planned for release before the year is out.
“This year, LTE services will begin and networks will be completed to create a positive cycle. No longer is LG U+ going to stay as the 3rd ranking business in the telecommunications industry.” Vice President Lee emphasized. He also explained that through the recent meeting with Google President Eric Schmidt a premium service based on Youtube will be released at the end of the year or early next year.
LG U+ will expand their 4G LTE service coverage to over 82 cities until the end of the year and create the national network by the first half of next year.