LG bets on Chocolate effect

Can new phones help the Korean manufacturer regain market share?

LG Electronics said it aimed to recover some of its lost market share in the European mobile phone market through strong demand for its "chocolate" phone which had improved the strength of its brand.

"There's 'Before Chocolate' and 'After Chocolate'. 'Before Chocolate' LG was seen as an affordable brand. With the product we increased our brand awareness quickly and it gave us confidence to go to (mobile telecoms) operators and position a GSM phone in the high tier," Dominique Oh, vice president for LG's European mobile phone business, said in an interview.

"Our target is to increase our market share. I think it's possible thanks to the 'chocolate' effect," he added.

LG's handset business lost market share in the second quarter, with sales slipping to 15.3 million units from 15.7 million a quarter earlier, while bigger competitors Nokia, Motorola and Sony Ericsson increased shipments significantly as a result of hit phones like the thin RAZR and the Walkman music phone.

The chocolate phone, a thin slider with a touch keypad and a shining dark cover, had a limited impact on second-quarter sales because it was only introduced in May.

"But there will be an effect in the second half," said Oh. LG said earlier it would sell at least two million chocolate phones in Europe in 2006.

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