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Departing chief executive Nam Yong  (Source: LG)

Incoming chief executive Koo Bon-Joon  (Source: Forbes)
Company is failing to keep up with Samsung, Motorola, Apple, and even HTC

When you think of the words "compelling Android smartphone" and "LG" in the same sentence its hard to bring an image to mind.  While the South Korean electronics maker does have a couple of Android phones (namely, the Ally and Optimus One) it has failed to keep up with Motorola, Apple, Samsung, and even much smaller Taiwanese manufacturer HTC.

That failure has cost Nam Yong the chief executive position at LG Electronics.  Mr. Nam has been ousted in favor of Koo Bon-joon, the head of trading firm LG International, another unit in the LG Group conglomerate.  The move echoes number one handset maker Nokia's decision to oust former CEO Olli-Pekka Kallasvuo last week.  Seeking to overcome sliding performance in the mobile arena, Nokia tapped Stephen Elop, a Canadian Microsoft executive, as Mr. Kallasvuo's replacement.

Lee Yong-jik, a fund manager at AIG Investments in Seoul, was optimistic about the change in leadership and the benefits it may bring LG's smart phone campaign.  States Mr. Yong-jik, "Koo is expected to reshuffle the organization and actively cope with the fast-changing IT industry... LG is expected to narrow the gap with Apple and other leading smartphone markers."

Even if the LG Group's LG Electronics unit is struggling, its still accounts for a significant portion of the group's revenue.  In the second quarter the unit accounted for one third of the groups total sales and one fourth of the total revenue.  That wasn't enough, though, to stop the group from posting a 120 billion won (appr. $103M USD ) loss for the quarter.

Mr. Koo, 58, attended South Korea's top college, Seoul National University, and the University of Chicago's business school.  He worked at AT&T for some time, then moved to LG.  His older brother Koo Bon-moo is LG Group Chairman's Chairman and CEO.

Mr. Koo, who owns the Korean professional baseball team the LG Twins, is reportedly extremely focused on winning.  When he took over LG Phillips LCD (later renamed LCD Display), he would reportedly greet employees by saying, "Let's become No.1."

In 1999, after LG took the display lead, he changes his catch phrase to, "Let's keep our No.1 title."

The new executive is reportedly preparing to clean house, relieving much of LG Electronics top ranks.  KB Investment & Securities analyst Harrison Cho comments, "Koo is expected to replace (mobile chief) Skott Ahn and other top executives.  Under the ownership management, LG will speed up the decision making process and quickly respond to the change of the market environment."

The company is preparing the successor to the low-end original Optimus (Optimus One), a high-end model complete with a 1 GHz processor, dubbed the Optimus Q.  It is also prepping Windows Phone 7 model(s) for launch.  LG Electronics thinks that the new Optimus Q phone, launching on as many as 120 carriers worldwide, is capable of selling 10 million units.  

That's an ambitious goal, considering that no single LG model has yet sold more that 1 million units.





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