Global handset market undergoes changes as more brands turn to profitability, say sources

Daniel Shen, Taipei; Steve Shen, DIGITIMES [Monday 4 February 2013]

A new scenario of the global handset market is taking shape as LG Electronics and Lenovo have begun generating profits from their handset businesses, while Sony Mobile Communications and ZTE have continued expanding their production scales as well as their penetration in the midrange to high-end segment, according to industry sources.

LG saw its smartphone shipments grow 23% sequentially to 8.6 million units in the fourth quarter of 2012 and its total handset shipments rise 7% to 15.4 million units during the quarter, according to company data. LG has also said its operating margin stood at 2% in the fourth quarter as revenues gained 15% sequentially in the 3-month period.

Some market watchers expect LG's handset business to remain profitable in 2013 as the vendor plans to launch more LTE-enabled models and also aim to ship over 45 million smartphones in the year.

Lenovo has also stated its handset business unit swung back to profitability for the first time in the fourth quarter of 2012, with handset shipments totaling 9.4 million units in the quarter.

Lenovo is expanding its sales to overseas markets and is reportedly considering the possibility of acquiring BlackBerry, the sources revealed.

Meanwhile, Sony and ZTE are also expected to turn to profitability in 2013, said the sources, adding that both vendors are aiming to ship 50 million handsets each in the year.