August 07, 2015 12:25
LG will roll out a new Nexus smartphone in conjunction with Google in October this year.
Nexus is a mid-priced line of phones for which Google manages development, marketing and support to test out its Android-based operating system, in collaboration with global smartphone manufacturers.
LG hopes to rebound with the release of the latest phone as its smartphone business is in the doldrums. The mobile division managed to achieve a W311.9 billion profit until last year thanks to the success of the G3 smartphone (US$1=W1,170).
But the latest model -- the G4 released in April -- has been no match for Samsung's Galaxy S6 and Apple's iPhone 6. LG managed to maintain the third largest share of the global smartphone market until last year but has now fallen to fifth place behind Chinese rivals Huawei and Xiaomi.
LG sold 14.1 million smartphones in the first half of this year but achieved a paltry operating profit of just W200 million.
Industry watchers believe the new Nexus phone could pull LG out of the slump.
Google makes Nexus phones with Samsung, LG, Motorola and other manufacturers. The Nexus 4 came out in 2012 and the Nexus 5 in 2013. The Nexus 5, featuring a five-inch screen and sleek design, became a hit, with tens of millions sold around the world.
The Nexus 6 that came out last year was manufactured by Motorola, but now Google has returned to LG. The new phone will be equipped with the new Android M operating system, which boasts half the battery use of existing operating systems.
The Android M will also make mobile payment available using Android Pay and feature a fingerprint-recognition function.
Collaborating with Google is advantageous for LG as the technological knowhow it gets from the project can then be applied to other smartphones. LG did the same with the G3, which featured technology from the Nexus 5.
But critics say an increasing dependency on Google could leave LG exposed. Taiwanese smartphone maker HTC was once Google's closest partner manufacturer, but once Google switched partners and joined hands with Samsung and LG, HTC's market share and influence waned fast.
Mindful of this concern, LG also plans to roll out a premium smartphone to keep its oar in the high-end market.
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