LG thrives in mid-tier, but moves higher up

Despite posting a 7% year-on-year decline and 12% decline from the previous quarter, LG’s first-quarter earnings beat estimates, and the company is expecting sales to improve going forward. The world’s third-largest handset maker had the most success in its mid-tier handsets, but is looking towards the higher-end to fuel its growth into Q2.

LG blamed the seasonal effect, as well as the global market contraction, on its decline in Q1. Yet despite the economy, mid-tier handsets, including the Cookie, a full touch-screen handset, and the LG-KS360, a qwerty keypad messaging phone, were its most successful. Since the Cookie launched in October 2008, the company has sold more than two million and aims to pass the 10 million milestone and expand from 40 to 60 countries within the year. LG also said recently that it shipped 20 million total qwerty devices worldwide. In North America alone, it shipped eight million enV series devices and six million Rumor phones.

LG, which makes slider, clamshell and candy bar handsets, didn’t say what form factor was the most successful, but it did outline plans to follow the rest of the market to the higher tiers. The company echoed Nokia and Sony Ericsson’s forecast that the global handset market will decline 10% year-over-year to near 260 million in Q2. While it expects the global economic downturn to continue, LG is forecasting it will grow by 10% in Q2 by this strategy of moving away from its successful mid tier and focusing on high-tier feature rich handsets. The first devices it hopes will help achieve this lofty goal include the Arena, messaging phones such as Xenon and Neon, the Viewty Smart, an 8-megapixel camera phone officially launched this week and the GD900, featuring a transparent keypad.

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