LG Electronics, Inc. was established in 1958 as the pioneer in the Korean consumer electronics market. The company is a major global force in electronics and information and communications products with more than 64,000 employees working in 76 overseas subsidiaries and marketing units around the world. With annual total revenues of more than US $16.9 billion (non-consolidated), LG Electronics comprises three main business companies: Digital Display & Media, Digital Appliance, Telecommunication Equipment & Handset.


The LG Telecommunication Equipment & Handset Company provides total solutions ranging from wired and wireless handsets to telecommunication equipment. The company is a leader in the innovation and development of cutting-edge technologies in next-generation wireless telecommunications and is steadily expanding its global market share in 3G (WCDMA / cdma2000) wireless systems.

LG Electronics' goal is to enable the intelligent networking of digital products that will make consumers' lives better than ever. For more information, please visit www.lgusa.com.





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Powerful Combination of Technologies from Microsoft and LG Raises Bar for Digital Recorder Market 




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It was hard to miss the ambitions of LG Electronics at the giant Consumer Electronics Show in Las Vegas in early January. LG's happy-face logo and pictures of its phones were plastered on banners running almost half a kilometer in any direction from the convention center just off the Strip. Inside the hall, 42-inch LG plasma TVs displayed maps of the sprawling exhibit a

Korea's LG: The Next Samsung?

Bested by its giant rival after the Asian economic crisis, LG is fighting a fierce battle to become a respected global electronics brand

At its 1,700-square-meter booth, the company showed off a plethora of new products, ranging from a $180 MP3 player the size of a matchbook to a 71-inch plasma TV (price: $77,000) meant to outshine anything offered by Sony (SNE ), Samsung, or Panasonic (MC ). "You shouldn't be second-tier forever," says LG Chief Executive Kim Ssang Su. "We've got to be a top-notch player."

CLIMBING MT. GUMSU.  Sound familiar? It should. That's the kind of talk the industry has been hearing for years from LG's crosstown rival, Samsung Electronics. Under Kim, who took over in October, 2003, LG is aiming for the major leagues. A 60-year-old LG lifer, Kim is determined to turn the company into a digital trendsetter -- and by 2010, into one of the world's top three home electronics players. "We must be a great company with great people," he declares.

Kim's given name, Ssang Su, translates literally as "doubly outstanding." And that's what this tough Korean boss expects all his lieutenants to be. He has ordered each of LG's three divisions -- mobile phones, digital displays, and appliances -- to improve productivity by 30%. And each unit is required to draw up both annual and three-year battle plans for attacking the world of digital electronics.

To drive home the message, a year ago he summoned LG's top managers from around the world -- 256 in all -- to a golf and tennis resort near the central Korean city of Jaechon for a two-day "bonding workshop." There, they all raised their right hands and pledged dedication to the cause of making LG a global brand. Then the execs gulped down shots of soju, the potent Korean spirit, and shouted "Global Top Three" in unison. The next day the entire contingent set off to climb the 1,016-meter Mt. Gumsu.




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OBSESSED WITH SAMSUNG.  It's like Korea in the old days, when the chaebol laid siege to one global industry after another. Except many of those forays were exercises in profitless expansion, while LG is making money -- at least at this stage of the game. Sales grew an estimated 21%, to $23.6 billion, in 2004, with net profits expected to more than double, to $1.5 billion. The company is the world's top maker of household air conditioners and the No.3 plasma-TV maker, while its joint venture LG.Philips LCD is the world's largest maker of liquid-crystal displays for TVs.

A latecomer to mobile phones, LG boosted it sales of handsets from 6.9 million in 2000 to 44 million last year, and it's the top supplier to American carrier Verizon Wireless. In September, LG overtook Japanese-Swedish venture Sony Ericsson Mobile Communications, claiming 7% of the global handset market, according to researcher Strategy Analytics. It's now at No.5, after Nokia (NOK ), Motorola (MOT ), Samsung, and Siemens (SI ). Consumers love its whimsical designs, such as the LG-350, with its seven-color blinking lights to signal incoming calls. Investors like LG's shares, which have jumped 37% in the past five months.

Despite all the success, LG remains obsessed with Samsung. Until the mid-1990s the two companies were neck-and-neck in the race to become Korea's top electronics producer. Both were hit hard by the Asian economic crisis in 1997, but Samsung began a painful restructuring and expensive brand-building push that catapulted it into the ranks of global leaders.

LG, on the other hand, spun its wheels, making an ill-timed bet on telecommunications -- everything from wired and wireless services to switching systems -- just when those businesses hit the skids. LG's botched strategy touched off an investor panic in 2000. Its shares plunged by 75%.

THE SPEED FACTOR.  Today that over-the-top telecom strategy is history -- and LG execs admit that they have a lot to learn from Samsung. CEO Kim speaks highly of the way Samsung pushed its employees "to the brink of the cliff" by creating a sense of crisis to speed the pace of change. Chief Financial Officer Kwon Young Soo marvels at Samsung's handset design skills: "Our quality is almost the same, but design-wise, Samsung is better," he says. And Park Mun Hwa, who heads LG's handset business, says he uses Samsung's strategy as a template for his own. "Samsung is our teacher," he says.

LG isn't a pure copycat of Samsung, though. For starters, Samsung has a dynamic chip unit, which at the high end of the business cycle can provide a huge boost to its profits. LG spun off its chip division five years ago. Still, Kim sees a way to outmaneuver Samsung in two ways. One is speed: LG beat Samsung in rolling out camera phones and MP3 phones in the U.S.

The other tactic is product differentiation. The company sells its high-end goods under the LG name, and lower-priced electronics as Zenith, a U.S. brand it bought in 1996. (A third brand, GoldStar, is being phased out.) This strategy allows LG to expand market share fast without tainting the LG brand.

SHEDDING LUCKY-GOLDSTAR.  Although LG isn't anywhere as well-known as Samsung, it's being taken far more seriously than it used to be by carriers and consumers alike. Last year it sold 3 million pricey third-generation cell phones to Hutchison Whampoa (HUWHY ), making it the largest supplier of 3G phones to the Hong Kong-based company, which has networks in eight Asian and European countries.

LG, which doubled its U.S. handset shipments to 20 million in 2004, expects its American phone sales to rise 70% more this year. Last year it sold 11 million handsets to Verizon Wireless and 6 million to Cingular Wireless and its merger partner, AT&T Wireless. And this year, Cingular selected LG as the featured vendor for a phone it's promoting on the American Idol TV show. LG "has developed an attractive portfolio of handsets with respectable quality," says Mike Cost, who oversees Cingular's handset purchases.

LG has come a long way from the days when it was known as Lucky-GoldStar -- a name LG would just as soon forget. Ask executives what LG stands for and they'll tell you "Life's Good," the slogan marketers dreamed up a year ago to retrofit the company's name. Founded in 1958 as a maker of fans, GoldStar Co. became Korea's first electronics company a year later when it started manufacturing radios. The outfit eventually made everything from refrigerators to elevators and semiconductors



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LG Electronics said Thursday it formed a strategic alliance with Home Depot, the largest home goods chain in the U.S., to sell its home appliances. LGE will start selling refrigerators, washing machines and dishwashers at Home Depot's 1,800 outlets in the U.S. starting from the second quarter. LGE has been supplying home appliances to the U.S.'s largest home appliance store Best Buy since 2003.



Asian Stocks Extend Gains in U.S. on Samsung; LG.Philips Surges

Jan. 14 (Bloomberg) -- Asian computer-related shares extended gains in the U.S., led by LG.Philips LCD Co., after Samsung Electronics Co. reported profit that beat analysts' estimates and said it will increase capital spending.


The Bank of New York Co.'s Asia ADR Index, which tracks the region's American depositary receipts, rose 1.2 percent to 111.13, completing the week with a 1.6 percent gain.

Samsung, Asia's biggest electronics maker, said fourth- quarter net income was 1.8 trillion won ($1.74 billion), topping the median 1.4 trillion won estimate from 19 analysts surveyed by Bloomberg News. The South Korean company forecast a shortage of liquid-crystal displays for use in computers and mobile phones in the fourth quarter of this year after three quarters of oversupply.


LG.Philips LCD Co., the world's second-biggest LCD maker after Samsung, surged $2.80 to $21. AU Optronics Corp., the third largest, climbed 96 cents to $13.69.

Asian technology shares rallied in local trading after Samsung's announcement, helping lift the Morgan Stanley Capital International Asia-Pacific Index 0.1 percent.

Nikkei 225 Stock Average futures expiring in March closed at 11,490 in Chicago, up from 11,430 in Singapore and 11,450 in Osaka.







LG Electronics is poised to use its digital TV-related core competitiveness in the three areas of core chip sets, display components (vertical sequencing), and software, as well as patents on digital TV transmission technologies (VSB/EVSB), and thus aggressively penetrate the rapidly-growing digital TV market (please refer to LG Electronics' Digital TV Competitiveness below).

LG Electronics has posted the first-spot share in the PDPTV market in 17 nations including Britain, Germany, Spain, Australia, Saudi Arabia, and South Africa, and will expand the number of nations where it will post the largest market share to 30 by 2005.

Meanwhile, to aggressively explore overseas markets, LG Electronics has structured digital TV production bases in the three overseas hubs of North America (Mexico), Europe (Poland), and China (Shenyang and Nanjing). The company is set to continue to analyze customer needs by region and conduct region-suited marketing campaigns.

The global PDPTV market is estimated at 3.5 million units for this year, and North America and Europe are continuously increasing their demand, and emerging markets are broadening its base. As such, the global PDPTV market will likely continue to expand to 6.3 million units by 2005, 10 million units by 2006, and 12 million units by 2007.
About LG Electronics, Inc.

LG Electronics, Inc. (CEO: S.S. Kim, 06657.KS) was established in 1958 as the pioneer in the Korean consumer electronics market. The company is a major global force in electronics and information and communications products with more than 64,000 employees working in 75 overseas subsidiaries and marketing units around the world. With annual total revenues of more than US$29.9 billion (consolidated), LG Electronics comprises three main business companies: Digital Display & Media, Digital Appliance and Telecommunication Equipment & Handset.

The LG Digital Display & Media Company provides core technologies for cutting-edge digital products and is a world leader in digital display products including plasma TVs, LCD TVs and monitors, and digital high-definition televisions (HDTV). The Digital Display & Media Company also provides digitally integrated products such as AV systems, optical storage, set-top boxes and home servers and is focusing on next-generation businesses such as home and mobile networks.






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