Korean vendors face surmounting handset pressure

Both Samsung and LG Electronics’ telecom divisions managed to boost handset sales in third quarter even while facing increasing pressure from Motorola and Sony Ericsson.

LG today reported Q3 sales of 2.3 trillion Korean won (U.S. $2.41 billion) for its mobile communications division, a 9.7% decrease from the third quarter last year. Earlier this week Samsung’s telecom division recorded 4.71 trillion won ($4.93 billion) in Q3 revenues, up 3% year over year. Both vendors, however, saw their operating profits from those divisions fall, down 5% for Samsung and 23% for LG.

Despite lackluster financial results, both Samsung and LG are continuing to sell handsets. LG shipped 16.5 million units in the third quarter, up from the 15.3 million shipped in the second quarter and the 10.5 million shipped a year earlier. Samsung doubled that number, shipping 30.7 handsets, up 17% from the second quarter. Samsung is the third largest global handset manufacturer, behind Motorola, which reported today Q3 shipments of 53.7 million. Sony Ericsson passed LG up for the fourth slot in the second quarter, announcing last week record Q3 shipments of 19.8 million.