The brilliant business performance is attributable to an increase in the sales of its GSM handsets in Europe and Central and South America. But a growth in the sales of WCDMA cell phones in Korea, North America and Asia also bolstered business results. A total of 19.1 million LG phones sold in the second quarter of the year, up 21 percent on-quarter. Thanks to soaring sales of premium phones, the company saw an operating margin of 11.6 percent, the first double-digit operating margin since 2002.

The results show that LG Electronics has defeated its archrival Samsung Electronics in mobile phone profitability. The information and communication sector of Samsung Electronics earned W4.5 trillion in sales and W350 billion in the second quarter, down 2 percent and a whopping 41 percent from the previous quarter, respectively. It registered an operating margin of 8 percent, far lower than LG.

Samsung Electronics’ average sales price is also lower than LG’s. While Samsung focuses on mid-priced handsets, LG capitalizes on premium models to achieve the remarkable business results. LG’s average sales price jumped from US$158 in the first quarter to US$160 in the second quarter, while that of Samsung fell from US$155 to US$148 during the same period. LG Electronics said demand in emerging markets and in advanced countries, especailly for the third-generation mobile phones, will be the driving force in the market in the third quarter. And it predicted that the amount of exports will keep growing due to a jump in the sales of medium and low-priced models to emerging markets; however, that will reduce profitability at the same time.

(englishnews@chosun.com )