LG looks to outsource more, shuns low-end

BARCELONA Tue Feb 12, 2008 9:19pm IST

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BARCELONA (Reuters) - Rapid sales growth at South Korea's LG Electronics will spur higher outsourcing of handset production this year, a senior company official said on Tuesday.

LG, like rival Samsung Electronics, has retained a vast share of its production but Chang Ma, LG's vice president for marketing strategy, said that is about to change.

"Starting this year, we will take outsourcing more seriously," Chang Ma told Reuters in an interview at Mobile World Congress trade show.

Some European and U.S. cellphone vendors have outsourced more than half of their production to firms such as Flextronics, Foxconn or Elcoteq.

LG's Ma also said the world's fifth largest cellphone maker has no intention to enter the ultra low-end of the market for phones which sell for less than 30 euros ($44), the fastest growing segment.

"We do not have any intention to go there," he said.

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