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LG looks for the sweet 'cell' of success

Mobile phone maker LG has a hit on its hands with a new model called the Chocolate’s -- with an award-winning design that has sold a million units globally in just the last seven weeks.  By CNBC's Jim Goldman
/ Source: CNBC

With cutthroat competition in global mobile phone sales, this may be the sweet “cell” of success for LG.

The company calls it the Chocolate, now making its debut in the U.S., available exclusively from wireless provider, Verizon. It's a way for the Korean cell phone maker to take on industry heavy-weighs Nokia and Motorola with cutthroat competition in global mobile phone sales.

“It’s different than anything that’s ever been on the market before. Not just because of its looks, but its technology as well”, said LG’s Jon Maron.

The Chocolate’s award-winning design grabbed instant consumer interest when it hit Korean store shelves last November, selling a million units globally in just the last seven weeks.

The phone’s MP3 player can hold 1,000 digital songs. It features 128-megabytes of memory and a 1.3 mega-pixel camera that takes pictures and video. Also, there is a soft touch, heat sensitive track wheel technology that eliminates the need to push buttons.

“It’s the latest, coolest thing that everyone wants to hold in their hand, and it doesn’t matter if you are 18 years old of 38 years old, it’s got something for everyone”, said Maron.

More than 800 million handsets will sell around the world this year, with much of the market dominated by Nokia and Motorola. Not to mention the inroads smart phones are making, like Palm’s Treo and the Blackberry from Research in Motion.

But there’s a surprising push toward the high-end, designer phones that command a premium and enjoy fat margins.

“There’s definitely a price premium and better margins associated with the designs”, said James Fauchette of Pacific Crest Securities.

And even though LG fights for Nokia and Motorola’s scraps, the big boys can’t afford to ignore Chocolate’s global momentum.

“That definitely starts to come up on the radar screen”, said Faucette.

Thanks to a massive marketing campaign, something everyone else will be aware of, too.