Has Qualcomm Become the Ball and Chain of This Smartphone Maker?
LG Electronics said that a shortage of Qualcomm’s (NASDAQ:QCOM) mobile-phone chips may impede plans to raise production and sales of smartphones this year. According to LG’s head of the mobile phone business, Qualcomm has failed to deliver chips and has hindered company production.
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Last month, Qualcomm announced it could not meet supply for the latest so-called baseband chips. Qualcomm is the largest maker of chips for phones and is the main provider of chips that offer faster connection to the Internet from mobile devices that use the Long Term Evolution — LTE — technology. In an attempt to lure consumers demanding higher speeds, phone makers like LG are arming their devices with Qualcomm chips.
LG recently unveiled a new Optimus phone and is introducing more Optimus devices using LTE technology to regain the market share it lost to Apple’s (NASDAQ:AAPL) iPhone and Google’s (NASDAQ:GOOG) Android devices. The Optimus phones helped LG post a 39 billion won operating profit ($34 million) in the first quarter, and helped the company turn around from a 101 billion-won loss a year ago.
In February, LG announced plans to sell 30 million to 35 million smartphones this year globally. According to LG’s head of the mobile phone business, the company intends on maintaining that target for now.
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