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January 7, 2009 9:37 AM PST

LG pushes ahead despite backpedaling consumer economy

by Erica Ogg

LAS VEGAS--Despite the troubled economy and an expected drop in consumer purchases, LG Electronics said it doesn't plan to reduce its marketing and research spending in 2009.

President and CEO of LG Electronics North America Michael Ahn said his company's North American sales increased to more than $14 billion during 2008, a 16-percent increase from the previous year. Five years ago, LG sales in the region were just $5.6 billion until the company began sharpening its focus on the consumer market with its TVs, mobile phones, and Blu-ray disc systems.

"We will not reduce marketing spending or R&D spending" this year, Ahn told the crowd gathered for the company's press conference at the Consumer Electronics Show.

That's good news for the consumer electronics industry. Many of its leaders are looking for any conceivable way to save money right now, and some of the biggest names--Samsung, Sony, and Panasonic--have all said they'll be cutting back on money spent on innovation.

LG had the stage to itself to kick off the yearly gadget show here in the desert. The company offered a glimpse of what it's been up to in its labs. Woo Paik, the company's chief technology officer, took the stage to show off the company's working prototype wristwatch phone. Paik took a phone call on stage with the touchscreen, water-resistant, music-playing, 3G device, which will be released in Europe first later this year.

LG has several lines of new LCD and plasma televisions equipped with wireless HDMI technology, which allows 1080p video signals to be sent to the set without HDMI cables. LG hasn't named any prices yet, but they will be available in May.

LG also continued a theme begun last year with its Netflix-connected Blu-ray player. The company will now incorporate Netflix directly into a line of its televisions as well, which will be ready for consumers in June.

Erica Ogg is a CNET News reporter who covers Apple, HP, Dell, and other PC makers, as well as the consumer electronics industry. She's also one of the hosts of CNET News' Daily Podcast. In her non-work life, she's a history geek, a loyal Dodgers fan, and a mac-and-cheese connoisseur. E-mail Erica.
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Add a Comment (Log in or register)
by gdmaclew January 7, 2009 11:28 AM PST
Maybe if LG and the other flat panel TV makers would stop concentrating on fancy features that the majority of prospective cunsumers don't want or don't care about and concentrate on smaller 32-inch TV's and start lowereing their prices on these, they might find that consumers will show renewed interest in purchasing.
$400-$500 is the magic price point for these mainstream TV's.
The average consumer doesn't care about 40 and 50-inch TV's.
Reply to this comment
by Big-Gee January 9, 2009 3:20 PM PST
oh I don't know about that... I'm a pretty average person and I really like the 52" screens and will probably go that route as have several of my friends and relatives.

I have a 32 " TV now and its too small.
The pricing is all about scale of economies. The more pervasive techology becomes the less expensive.. so hang on long enough and you will probably be able to buy your whatever to 40" for under $500. 52's that were $4k a year ago now go for around $2500, and Plamas that were $15k a few years ago can be bought of under $2k now. So its looking good!
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