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High-speed dialing:LG scores biggest U.S. success with cell phones
By Allen Wan, CBS.MarketWatch.com
Last Update: 8:18 PM ET March 25, 2004


NEW YORK (CBS.MW) - While it produces everything from air conditioners to plasma TVs, LG Electronics' greatest success in the U.S. has been in the wireless-phone market.

In the third quarter of 2003, the Seoul-based company sold 8 million mobile phones in the U.S. It's built a 25 percent share of the market for "Code Division Multiple Access" phones - the dominant U.S. technology - in just five years.

Its phones carry a growing array of high-end features, including built-in MP3 players and camcorders, on-demand video and two-way mobile videoconferencing.

LG (LECLF: news, chart, profile) made inroads in a short time on the strength of its camera phones and through partnerships with Sprint PCS (PCS: news, chart, profile) and Verizon Wireless (VZ: news, chart, profile) -- the two biggest U.S. operators of CDMA networks.

"The U.S. handset market has incredible potential for growth and is ready to take huge steps forward in adopting advanced mobile technologies," Juno Cho said last month after taking the helm of LG Mobile Phones, a unit of LG Electronics.

For 2004, LG is aiming to sell over 36 million handsets, up from the 27.4 million in 2003. Last year, it ranked fifth in the world in the wireless phone market with a 5.2 percent share, trailing Nokia (NOK: news, chart, profile), Motorola (MOT: news, chart, profile), Samsung (SSNGY: news, chart, profile) and Siemens (SI: news, chart, profile), according to industry group IDC.

If camera phones take off in America like they have in Asia, LG will have a strong competitor in the VX 6000. Shaped like a clam, the handset is one of the lightest available at less than four ounces.

A noteworthy feature is a camera lens unobtrusively embedded in the top half of the shell. There's also a tiny mirror next to the lens, allowing owners with a vanity streak to take self portraits.

Pricing and technological progress could drive LG's success, said David Linsalata, associate analyst at technology research firm IDC.

Said Linsalata: "The price to include a camera continues to drop and faster networks are being rolled out and improved (upon) nationwide. These changes bring with them a clear opportunity."

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