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LG Electronics Ready to Roll Into the U.S. Market

July 2001

By Tatyana Sinioukov

SEOUL, South Korea—Starting now and continuing through the next couple of years, Korea-based LG Electronics (LGE) will be introducing a number of home appliances into the U.S. market. This move, announced by the company during a Korean press tour organized exclusively for the American journalists in South Korea in late May, is part of the company's plan to pursue what LGE calls "global competitiveness."

Already a household name in Korea, and in parts of Europe and South America, LGE is now concentrating its efforts on becoming a major producer of home appliance digital TVs and telecom systems for the U.S. market. In November, 1999, Zenith Electronics became LGE's subsidiary. Since 1999, LGE has also been pursuing the "Digital LG" concept by developing Internet-enabled appliances and multimedia devices that support Internet services and home networking, and now it says it's ready to introduce some of its Internet-enabled products in the U.S.

According to Michael Ahn, a Seoul-based executive vice president, Digital Appliance, Overseas Sales, in 2001, LGE will introduce to the U.S. market its high-end air conditioners, OTRs, some microwave models, refrigerators with door-cooling technology and front-loading washers, all under the LG brand. LGE's Energy Star-labeled refrigerator line will roll out in the States by August, Ahn added.

LG Electronics will introduce in the 4th quarter its 1.4- and 2.1-cu. ft. microwaves with True Cook Plus technology ($149 SRP and $169 SRP, respectively). The True Cook Plus technology is a software system that translates numerical codes found on packages into cooking instructions and then "tells" the microwave for how long to cook the food and adjusts wattage power.

LGBy introducing a number of appliances under the LGE brand, Ahn said LGE plans to compete with high-end manufacturers that sell their home appliances in the U.S.

"Our idea is to promote our (LGE) brand as a high-end brand with technologically advanced products," said Ahn.

Advanced markets embrace technology more easily, Ahn suggested, so although, he admitted he cannot predict how the U.S. consumers will accept all of the LGE appliance products, the company will just have to see, introducing them one by one in the meantime.

The Internet-enabled LGE products that are scheduled to be introduced to the States over the period of two years include a refrigerator, a washing machine, an air conditioner and a microwave.

The Internet-enabled refrigerator has an LCD screen and is really a multimedia appliance with its own LAN port, a TV, videophone and digital camera. The Internet refrigerator now sells in Korea and the U.K. In the U.S., it was shown last in April at the Kitchen & Bath Industry Show, Orlando, Fla. LG

According to Ahn, the Internet refrigerator will hit American homes sometime next spring, as is, for the same price of about $10,000 that was set originally. A second generation, however, will have more features, different dimensions and a less hefty price tag (a $4,000 price range was mentioned in May). No U.S. introduction date was set yet.

LGE has done some market research on the Internet refrigerator in the U.S., Middle East and the European markets, Ahn said, and is fairly sure the product would do well in the U.S., even with the current economic downturn. "We don't have to sell a lot of them to make a profit," he commented. Also, Ahn said, his company plans to work with the buying groups in the U.S. on the Internet refrigerator's U.S. debut ("We will focus on regional distributors") and will have to decide who will provide training, installation and extended services. LGE also said it may develop a remote control and a bar code reader for the Internet refrigerator.

Another Internet-enabled appliance is the Turbo Drum washing machine that will eventually make its way into American homes (no introduction date was set yet). Turbo Drum's wash cycles can be programmed directly from the Web. The Turbo Drum washing machine runs LGE's own software, i-@ble Operating Program, to connect the machine to the Internet. The Turbo Drum also comes with a connecting cable and can be attached to a PC to find an appropriate washing cycle on the machine's Web site. LGE is currently developing the terminal for the home network and access modem that would enable consumers to control and monitor this product remotely.

LGThe machine's drum is tilted forward 12 degrees, which, according to LGE, reduces noise, vibration and water consumption

and improves Turbo Drum's washing performance. This design, the company said, also makes it easier to remove laundry from the washer.

Currently, LGE's Internet-enabled air conditioner is available in Korea only, but the company said it will start exporting it globally some time this year. According to LGE, the air conditioner will have all its Internet-related features by 2003.

The air conditioner can be operated remotely via the Internet, which makes it part of the home network. It has remote monitoring and self-diagnosis functions, which allow it to determine when it malfunctions by linking to the service center's Web page, and then to "notify" its owners. LGE said it has invested 40 researchers and three years of R&D into this product. Just like the Turbo Drum washer, the air conditioner has its own port, uses LGE's proprietary software and can be connected to a PC. When users register their unit on the Web site, they can access the site even when they are away from home to control their air conditioner (for instance, adjust the settings to minimize the power of operations when the unit is not in heavy use). Users can also set news, weather and schedule information with the "Useful Information" setting on the a/c's Web sites ( or www., LGE's site for home network products) to be displayed in the conditioner's window. The display window can also be used to display short two-way messages.

LGE will eventually unroll its high-end Internet microwave (model M-G2701T) in the U.S. Currently, it is sold in Korea only. This microwave has a port for Net access, PC connection capability and an LCD screen. Users will be able to access to download recipes, cooking tips and other food information. The microwave, LGE said, will also be able to store up to 20 frequently used cooking settings. When downloading the programs on the site, LGE said, users won't have to program the microwave manually. Instead, the microwave will automatically program itself. n

LG Electronics: Just The Facts

n LG Electronics (LGE), now a $54 billion business, was

established in 1958 in South Korea under the name of Goldstar.

n Goldstar was the first Korean CE company to break into the U.S. market with its radios in 1962.

n The company built its first Goldstar Design Center in 1983.

n The company changed its name from Goldstar to LG Electronics

in 1995, and acquired Zenith Electronics in November 1999.

n In 2000, LGE reported about $13 billion turnover, operating five companies, with each

company being run autonomously: Digital Display and media, Digital Appliance, Digital Media,Digital System, Digital Handset and Digital Network (see other sidebar).

Also in 2000, LGE merged with LG Information and Communications, has entered into a

joint venture with Philips to produce cathode ray tubes, and teamed up with Hitachi to

work in the optical storage market.

n Currently, LGE has more than 70 subsidiaries in 40 countries; 100,000 employees in

more than 120 countries; and 25 domestic and 13 foreign-based research centers and technology institutes.

Some of LGE's most recent design achievements include:

n set-top box for high-definition broadcasting, due in late summer under the Zenith brand;

n high-definition video recorder, shown by LG in Zenith's CES booth;

n high-definition video disk player, shown by LG in the Zenith CES booth;

n 29-inch digital LCD TV, planned for introduction under the Zenith brand in first half of 2002;

n ASIC for digital VCR;

n CD recorder for MP3 files;

n a 12x CD-R;

n a linear compressor;

n flat 15-inch cathode ray tube;

n LCD monitor with fingerprint recognition;

n flat multi-cathode ray tube.

Michael K. Ahn,

executive VP of

LG Electronics.

LG refrigerator with a door-cooling system, available this summer in the U.S.

Internet Turbo Drum

washing machine.

n Internet refrigerator;

n Internet microwave;

n Internet washer;

n Direct-drive washer;

n Internet air conditioner.

LG's Internet-enabled refrigerator. Call (201) 816-2000.

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