LG 2001 Annual Report Download - page 41

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Our CDMA2000 1X systems
were successful sellers in the
United States and grasped
the number one global
market share for CDMA
WLL systems.
Telecommunication System
2001 Review & 2002 Strategy
In 2001 a majority of telecommunications equipment makers faced difficulties as
telecom operators severely cut capital expenditures. As a result, Telecommunication
System Company showed negative growth for the first time after a long string of years
with more than 10% profit margin. Despite such difficulties, we did manage a successful
penetration of overseas markets. Our CDMA2000 1X systems were successful sellers in
the United States and grasped the number one global market share for CDMA WLL
(Wireless Local Loop) systems.
On the domestic front, we successfully developed 1X EV-DO and W-CDMA systems,
and maintained the number one position in the PBX (Private Branch eXchange) and Key-
Phone sectors. Our commitment to quality and innovation hasn’t been shaken by a
troubled year.
2002 is likely to present challenges similar to those of 2001, as telecom operators still
appear to be reluctant to spend on deployment of 3G technologies. There are, however,
glowing signs of CDMA market expansion in parts of Asia, particularly China and India.
New markets for high-speed data service infrastructure are also emerging and despite
operators wariness, an initial investment seems imminent. This will provide clear
opportunities for LGE. Our leadership in the W-CDMA industry in Korea will provide a
base from which to become world players.
Considering the risks and opportunities that 2002 holds, we plan to reach our goals by
implementing the following strategies:
First, following the Korean governments willingness to help CDMA system providers
take on global markets, we will fine-tune our telecom equipment and adopt aggressive
overseas marketing tactics. This calls for a rearrangement of our R&D taskforce and a
focus on commercializing our IMT2000 system in both CDMA2000 and W-CDMA
sectors. To position ourselves as industry leaders we will customize our products to the
specific needs of operators.
Second, we will maintain our leading market position in our backbone businesses while
taking our internet service equipment abroad. To this end, we must complete our
restructuring of data networks and Switching system businesses and concentrate our
resources on core future areas such as high-speed data networks and IP (Internet
Protocol) Telephony equipment.
Last, it is imperative that these first two strategies clearly lead us back to a position of
growth. Only with a continued commitment to technological innovation, proper risk-
management and intelligent cost-cutting measures can we maximize profitability and
establish leadership in the rapidly changing systems market.
Head of Telecommunication System Jhung Gun Park
LG Electronics Inc. The
43
rd Annual Report