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LG Electronics Inc. IAnnual Report 2002 I34 35
strong profitability growth. On the other hand, there have been positive developments as well. In the
3G sector, we began to reap benefits of R&D investment. For example, LGE earned the right to supply
IMT-2000 systems for WCDMA service to KTiCOM and SKIMT. In the wired sector, LGE was selected as
a co-developer of softswitch, a key component of next-generation networking, by KT (formerly Korea
Telecom). Moreover, we managed to solidify its No. 1 market position in the Key-phone and PBX
(Private Branch eXchange) sectors.
Outlook
Lucrative business opportunities are projected to evolve from commencement of development of 3G
mobile service infrastructure and new investment in high-speed data services. In this regard,
Telecommunication System Division will implement a set of initiatives in the new year. For example, we
will focus on fortifying the mobile telecommunication business base. On the domestic front, we will seek
to expand its market share through early stabilization of its commercial systems for WCDMA service and
to expand sales in the CDMA sector, in which business is already normalized. In foreign markets, priority
will be placed on the pursuit of profitable projects along with the steady development of cost-efficient
products and components that will help to enhance the overall competitiveness of our systems.
Contribution to Sales
Total Sales
Telecommunication System
0.7
0.5
Sales
01
1.2
0.9
0.7
1.5
02
02
0.2
0.2
0.3
Product Composition
Mobile System
Network System
Others
Quarterly Sales
0.2
0.2
1Q.
0.2
2Q.
3Q.
0.3
4Q.
Contribution to Sales
(%)
Contribution to
Operating Income Product Composition
82
CDMA
WLL
GSM
1.2
0.8
(Trillions of Korean won)
Sales Quarterly Sales
01
(April-December)
0.9
3.5
2.7
2.4
02
02
2.3
1.9
1.5
0.8
0.9
1Q.
0.8
2Q.
3Q.
1.0
4Q.
Total Sales
Mobile Handset
30
19 14 4
5
27
8
65
ensure continued robust growth of its GSM sales worldwide. Furthermore, we will move proactively to
expand its market share in the 3G service for CDMA/ WCDMA mobile networks ahead of the
competition. To this end, we will strive to acquire additional intellectual property rights (IPRs) related to
3G mobile service.
2. Telecommunication System
Review
In 2002, most wired and wireless communications equipment makers experienced drastic downturns in
their sales and bottom line, primarily as a result of the continued stagnation of the global
communications infrastructure industry. LGE was no exception to this difficult operating environment,
with its telecommunication systems revenue slumping by 39.5% in 2002 year on year to 904 billion won.
To cope with such a negative business environment, the Division implemented a set of extensive
measures for comprehensive business rationalization and restructuring. These efforts were focused on
the winding up of various business lines that were deemed less competitive and held little potential for
(Trillions of Korean won)
Domestic SalesExports
(%) (% )
Domestic SalesExports
(April-December)
(Trillions of Korean Won) (Trillions of Korean Won)
(%) (% )
LG전자 - 본문 2003.4 .22 7:15 AM 페이지38