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Carolyn Ong

In the race to pack mobile phones with more elaborate features, South Korea's LG Electronics is offering a colour CMDA (code division, multiple access) handset capable of receiving video on demand at data speeds of 2.4 megabits per second (Mbps).

The product, to be launched in Korea in May, will be sold linked with video-on-demand services.

LG Electronics' officials said one possible use would be receiving live video feeds of this year's World Cup soccer matches.

In another new-product announcement yesterday, Motorola launched its V70 mobile phone in Hong Kong. It will go on sale early next month.

LG also has produced a tiny digital still camera that attaches to the phone, allowing users to send small picture files attached to e-mails.

LG Electronics CDMA handsets laboratory vice-president Jong-sool Park said the handset used 1xEV-DO (evolutionary-data optimised) technology, allowing transmission speeds of up to 2.4Mbps. This is an interim technology to 3G that allows what Mr Park describes as 'near-3G speeds'.

The 1xEV-DO technology is relatively cost-effective as it simply can be added to existing CDMA2000 radio base stations or overlaid on an existing CDMA network, enabling operators to provide high-speed mobile Internet capabilities while efficiently utilising broadcast spectrum.

Networks using the CDMA2000 1xEV-DO technology will support such 3G applications as streaming audio, video and data transfers, offering peak data rates up to 2.4Mbps in a standard 1.25-megahertz carrier, with a minimum average throughput of 600 kilobits per second.

The new video-on-demand handset, featuring a 6.3cm display capable of 4,000 colours, is not the only advanced Internet-enabled phone LG Electronics makes. Over the past 18 months, the company has produced Java-enabled and Brew (binary run-time environment for wireless) handsets for the US market. Some Java handsets also are sold in Korea. LG Electronics' main mobile operator partners in the US are Verizon and Sprint.

Brew is Qualcomm's entry in the battle to be the dominant operating system for mobile phones. Combatants include Texas Instruments, Motorola, Sun Microsystems, Nokia, OpenWave, Microsoft and chip giant Intel. They hope to create a market for installing software applications to make mobile phones more useful.

LG's new video-on-demand phone comes in a clam-shell shape, which seems to be standard for the firm's new phones.

Chris Cha, manager of product planning at LG Electronics' CDMA handsets unit, said: 'We believe that the clam-shell form factor we have chosen is the best design for data phones. It is effectively divided into the OS [operating system] part and the data-input part. At the same time, it keeps its small size.'

LG Electronics has made smart phones for the US market in the past. These also were CDMA handsets optimised for data running LG's proprietary operating system, which is icon-driven.

However, the company will not follow Samsung and invest in smart-phone development. Samsung makes phones running the Palm OS for the US market.

'It is not a volume market yet and because our margins aren't high, we have to look for volume,' Mr Cha said. 'Smart phones are popular in the US but even then it is about 2 per cent to 3 per cent of the overall handset market and that is still too small.'

He pointed out that licensing one of the popular smart-phone operating systems, such as Palm's, would cut the already thin profit margin.

He said it cost about US$10 to US$15 to make the average LG mobile phone and profit margins ranged between 3 per cent and 5 per cent on the low end and up to 15 per cent for high-end phones.

Mr Park said Qualcomm's CDMA chipset represented about 20 per cent of the cost of making the phone.

Despite tough times, the company has set aside 7 per cent to 8 per cent more for research and development investment than the year before. It will devote about US$497 million to develop 3G mobile telecommunications.

However, Mr Park felt true 3G would take time to become a reality as there were still no standards and among the many setbacks were lack of IDD roaming ability and the issue of capatibility between systems.

In the meantime, LG will focus where there is volume and concentrate on the China market. It is also eyeing India, to which it hopes to gain entry this year.

Mr Park said: 'Last year we entered the GSM [global system for mobile communications] market. We aim to become one of top five makers of GSM handsets in the world this year.'



LG ready to offer video mobile phone