Business Tech

In the midst of the global recession, at least one company's business is booming.

LG Electronics reported on Wednesday record-high quarterly earnings of $1.15 trillion Korean won ($920 million), a leap of 62 percent over the year-ago quarter.

Global sales for the quarter that ended June 30 shot up 13.8 percent to 14.5 trillion won ($11.63 billion).

LG Electronic's second-quarter results

(Credit: LG Electronics)

The net profit surpassed expectations of analysts polled by Dow Jones, who had forecast around 743 billion won. Earnings also enjoyed a strong rebound from the first quarter when LG took a loss of 197.6 billion won.

LG's results were helped by a weak won vs. U.S. dollar. But skyrocketing sales of both cell phones and flat-screen televisions also boosted the bottom line.

LG shipped a record 4.28 million LCD TVs in the second quarter, compared with 2.96 million a year ago. Cell phone shipments reached 29.8 million units in the quarter, 8 percent higher than the year-ago quarter and 32 percent higher than the first quarter. The company said customer demand was especially heavy for its new touch-screen Cookie phone.

For the current quarter, the company sees revenue growing more than 10 percent based on continued demand for its TVs and phones. LG said its new LCD TVs with LED backlighting will help it win a greater share of the flat-panel market. Although LG expects industrywide shipments of cell phones to drop 6 percent globally this year, the company expects that its own shipments will continue to rise.

Last month, LG said that it's looking to surpass Sony as the No. 2 LCD TV maker by increasing its shipments this year 70 percent to 18 million.

With the growing demand for virtual desktops and centralized cloud computing, LG Electronics and NComputing announced on Thursday a partnership to make and distribute desktop monitors optimized for virtualization. The new LCD monitors would incorporate NComputing's virtualization products that enable up to 11 people to share a single PC.

Through NComputing's technology, each person has his own keyboard, monitor, mouse, and personal files, but can share common applications and settings stored on the single PC. LG and NComputing expect the new monitors to significantly cut ownership and maintenance costs.

"Our customers are taking into account not just the purchase price of computing, but also long-term costs connected to IT support, maintenance, and electricity," said Ron Snaidauf, vice president of commercial products for LG Electronics USA Business Solutions. "Combining NComputing technology with our market-leading monitors creates the optimal solution for today's cost-conscious businesses."

LG plans to bring to the partnership its global customer network and its ability to produce a high volume of monitors. The new LG SmartVine N-series line is set to include 17-inch and 19-inch monitors, and will embed NComputing's virtualization hardware inside.

NComputing has won praise and a growing customer base for its desktop virtualization product as a way to slash technology expenses. The company says it has more than 40,000 customers across 140 different countries.

Late last year, NComputing picked up a contract to supply schools in India with its technology. The company also impressed former Microsoft executive Will Poole enough that he joined its board last September as co-chairman.

The Intel architecture is coming to smartphones.

LG Electronics and Intel are announcing a collaboration based on Intel's Moorestown silicon and the Linux Moblin v2.0 software platform at the Mobile World Congress in Barcelona on Monday. The future LG device--which is being described as a smartphone--is expected to be one of the first Moorestown designs to market.

Moorestown is the code name for the successor to Intel's current Atom processor.

"LG and Intel's common goal is to unleash rich Internet experiences across a range of mobile devices while delivering the functionality of today's high-end smartphones," the companies said in a statement.

The key to getting Intel chips that run all the most popular PC software into a phone is reducing the power consumption below the Atom chip used today in Netbooks, according to Ashok Kumar, an analyst at investment bank Collins Stewart. "If you look at the power consumption projectory, they dropped Atom to two watts and they expect to drop that (with Moorestown) by a factor of 10," Kumar said.

"That would squarely be in the power envelope of a smartphone," Kumar said. Intel mobile processors found in mainstream laptops have a thermal envelope of between 25 and 35 watts.

But whether Moorestown can actually achieve the energy frugality of silicon from longtime cell phone silicon suppliers like Qualcomm and Texas Instruments remains to be seen. Toshiba recently disclosed that its using Qualcomm's Snapdragon chip in a future phone and Qualcomm supplied the main processor in the first phone using Google's Android OS.

Moorestown will also be used in MIDs or mobile Internet devices. And it seems, at times, that the terms smartphone and MID are used almost interchangeably. "The MID segment will drive growth at LG Electronics. We chose Intel's next-generation Moorestown platform and Moblin-based OS to pursue this segment because of the high performance and Internet compatibility this brings to our service provider customers," Jung Jun Lee, executive vice president of LG Electronics, said in a statement.

Neither company gave a date for availability of the LG device, but it is expected to appear soon after Moorestown is available. Intel is saying that Moorestown will be available in 2009 or 2010, though the second half of 2009 appears increasingly likely.

Updated at 12:40 p.m. PST with Dell's comments and historical perspective on Apple iMac shortages due to lack of LCD flat panel displays.

LG Display, Sharp, and Chunghwa Picture Tubes agreed to plead guilty to criminal charges for participating in a liquid crystal display price-fixing conspiracy and pay $585 million in fines, the U.S. Department of Justice announced Wednesday.

The three companies worked in concert to set prices on thin-film transistor LCDs, which are used in computer monitors, notebooks, televisions, mobile phones, and various electronics, according to the antitrust unit of the Justice Department.

Apple, Dell, and Motorola were among the companies affected by the price fixing, antitrust regulators said.

"The price-fixing conspiracies affected millions of American consumers who use computers, cell phones, and numerous other household electronics every day," Thomas Barnett, assistant attorney general for the Justice Department's antitrust division, said in a statement.

The three companies, which were charged with violating the Sherman Antitrust Act, allegedly held "crystal" meetings and engaged in communications about setting prices on the TFT-LCD displays. They agreed to charge predetermined prices for the displays, issued price quotes based on those agreements, and exchanged sales information on the display panels, in order to monitor and enforce the agreement, the Justice Department said.

LG Display agreed to pay a $400 million fine, marking the second-highest antitrust fine ever imposed. The company pleaded guilty to setting prices with other unnamed suppliers for the TFT-LCD panels worldwide from September 2001 to June 2006, when the company operated under the name L.G. Philips LCD, a joint venture between LG Electronics and Philips Electronics. LG Display America was known as L.G. Philips LCD America.

Sharp, meanwhile, agreed to pay a $120 million fine and participated in the conspiracy between April 2001 and December 2006 with other unnamed suppliers. The conspiracy involved setting prices in three separate agreements for TFT-LCD panels sold to Dell, which used them in computer monitors and laptops.

And during the period ranging from the fall of 2005 to mid-2006, similar price-fixing schemes were employed in sales to Motorola, which used the panels in its popular Razr mobile phones.

Sharp's conspiracy also touched Apple from September 2005 to December 2006, in which Apple used the displays for its popular iPod music players.

Chunghwa agreed to pay a $65 million fine, for its participation in the price-fixing scheme from September 2001 through December 2006.

The Justice Department began its investigation in 2006 and notes its investigation is still on-going.

"Dell is aware of the announcement and will review its impact, but we have no comment at this time and probably will not in the near term as it's an ongoing investigation," a Dell representative said Wednesday, in an e-mail response.

Sony, a major LCD panel producer, also declined to comment.

For the LCD industry, problems began in the late 1990s when a surge in demand for notebooks and handheld devices drove up the need for LCD glass. As a result, the TFT-LCD makers built glass plants in Korea and Taiwan during 1998 through 1999.

But as those factories came online and began to pump out LCD glass, a glut took hold. And by the fall of 2000, prices on 15-inch flat panels plummeted to a point that in some cases manufacturers were having to sell their panels at $5 to $10 below cost.

Between October 2000 through August 2001, LCD makers were feeling the pain of an over supply of panels. But after August 2001, prices began to rise.

And apparently, it was no coincidence. Five months prior, Sharp had begun fixing prices on TFT-LCD panels sold to PC giant Dell and in September 2001, LG and Chunghwa also began to engage in price fixing, as well.

Analysts, at the time, predicted LCD shortages, especially in the 15-inch panel, would continue through 2002.

IDC analyst Bob O'Donnell noted at the time that while PCs tend to only go down in price over time, flat panel prices have occasionally risen. Said O'Donnell at the time:

LCD is one of the few (markets) where things have actually gone up in price.

Although Sharp admits to engaging in price fixing with Apple's iPod screens in the 2005 to 2006 period, it remains unclear whether other vendors may have engaged in a similar behavior with Apple back in 2002.

That's when Apple was hit with a component shortage of 15-inch LCD panels for its newly introduced all-in-one flat panel iMacs. As a result, Apple suffered a shortage of iMacs after introducing and touting its sleek iMac.

CNET News' Erica Ogg contributed to this report.