LG targets 10 pc of GSM market share by 2008

NEW DELHI: With an aim of 10 per cent market share of GSM by 2008, South Korea's LG Electronics on Thursday said it will target GSM mobile business in India since its CDMA market share was deteriorating due to flooding of Chinese products.

The company also plans to make India an export hub for Middle East and Africa in GSM category.

"We don't think CDMA is a profitable here in India, the company is loosing a lot of money and profits are going down due to low cost models coming from China," LG India Managing Director and LG President South West Asia Moon B Shin told reporters here.

He said GSM was a future growth engine for LG in India as the company was targeting to be one of the top three players in domestic market and has slated strategy to take on the number one Nokia.

"We are going to increase our GSM market share from current 1.4 per cent to 8-10 per cent by 2008 with the help of product leadership, enhanced distribution network, after sale support service and a range of new models in the premium segment," Moon said.

LG on Thursday launched two new premium GSM mobile handsets from its black label series named LG Shine slider phone for Rs 15,999 and LG Shine bar phone for Rs 8,999.

The company also plans to expand its production unit located at Pune to eventually serve India as well as Middle East and African markets by producing locally.

"So far, we have invested 60 million dollar in the Pune factory and will keep spending several million dollars every years to add atleast two production lines every year, Eventually 3-4 years down the line it should be a strategic factory for LG with 10 million handsets capacity," Moon said.

On the issue of decreasing profitability on the CDMA front, Moon said LG India's turnover for CDMA phones in 2005 was 300 million dollar, while it went down to 250 million dollar last year and in the current year it was expected to go down further to only 150 million dollar.

In volume terms, LG sold 9 million CDMA handsets and 1.2 million GSM handsets in India last year, but CDMA sale is likely to go down to 6-7 million, while GSM handsets would go over two million handsets this year.

This years LG was expecting revenue of 140 million dollar from GSM handsets which would include targeted sale of 50,000 LG Shine handsets by December 2007.