LG may consider handset contract-manufacturing

11 Jun 2008

LG Electronics is considering contract-manufacturing handsets but there were no discussions in progress, a Reuters report said.

'We are considering the possibility of entering talks with OEM companies,' Choi Jun-hyuk, an LG spokesman quoted by the Reuters report said.

Leaders in the original equipment manufacturer industry such as Foxconn International and Flextronics are likely to be LG's future partners should LG decide to outsource handset making, he said.

Investors and analysts have been expecting LG to outsource production of some low-end phones due to rapid demand growth and higher labour costs at home.

Bigger rivals such as Nokia and Motorola have already outsourced a large portion of their production to OEM companies the Reuters report said.

Choi said LG, which runs six mobile phone plants at home and abroad, can meet mobile phone demand for the time being by expanding its own capacity.

Despite the slowing global economy, South Korea-based LG is expected to surpass this year's mobile phone sale target of 100 million units helped by solid sales of new high-end phones such as touch-screen Viewty and a weaker won currency the Reuters report further said.

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