LG backs off Windows Phone for now, report says

Analysts say LG is likely interested in next generation Microsoft OS, Windows Phone 8

Smartphone-maker LG Electronics has backed off producing Windows Phone devices for now and will instead focus on Android phones, according to a report.

The Korea Herald reported Monday that LG, based in Seoul, South Korea, will take a step back from the Windows Phone platform, though it intends to "continue research and development efforts" on the Microsoft operating system.

LG currently makes the Optimus 7 based on Windows Phone 7 and other WP7 handsets.

LG has noted that Windows Phone 7-based devices hold less than 2% of the global smartphone market, according to multiple market analysts.

"The total unit[s] of Windows Phone sold in the global market is not a meaningful figure," an LG spokesman told the Korea Herald.

In 2009, LG had decided to make Windows Phone its primary smartphone OS, with plans for 26 new Windows phones in 2012.

Ken Dulaney, an analyst at Gartner, said the LG decision to cut its Windows Phone plans, at least temporarily, is likely not an absolute reversal of strategy.

He theorized that LG may be waiting for Windows Phone 8 to materialize late this year before producing more devices on the platform.

"Rather than putting out another Windows Phone and see it struggle, they are wise to wait for Windows Phone 8," Dulaney said. "It's a smart move for them. Windows Phone 7 hasn't reached critical mass."

Jack Gold, an analyst at J. Gold Associates, said LG will "no doubt re-evaluate" its options once Windows Phone 8 launches and "starts hitting some significant volumes."

LG is putting resources into developing Android devices and needs to continue doing so to compete with Samsung, Gold said.

Also, LG has committed to use Intel's Atom chips on Android devices, which could be sapping its resources a bit.

LG could not be reached for comment on the Korea Herald report. Microsoft declined to comment on it.

Dulaney said that while LG is likely to building Windows Phone 8 devices, the retrenchment on WP7 "says that Microsoft hasn't gotten it yet."

Microsoft could fall further behind its rivals once Google announces its Jelly Bean operating system and Apple announces the next-generation iPhone later in 2012.

"Microsoft takes so long to do everything and after Google and Apple act this year, that could put Microsoft behind again," Dulaney said.

"Microsoft has to learn to appeal to the consumer in a way that helps the consumer tie the Windows Phone into business. If Windows Phones have weaker features on the consumer side, they need to say that's mitigated by the connection to the enterprise," he added.

Matt Hamblen covers mobile and wireless, smartphones and other handhelds, and wireless networking for Computerworld. Follow Matt on Twitter at @matthamblen, or subscribe to Matt's RSS feed . His e-mail address is mhamblen@computerworld.com.

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