LG Mobile Business Takes Company Profits Down
LG Electronics who is set to launch a new G5 smartphone next month is bleeding losses in their mobile business while overall profits have slid 38% during the last quarter.
The Korean Company achieved increased sales of major appliances and improved profitability for its OLED TVs but despite this the Company still reported a $167M loss for the quarter.
LG management said that losses in its mobile segment and an increase in year-end corporate taxes contributed to the poor result.
Operating profit rose 27 percent year over year to 349 billion won thanks to strong appliance and TV sales.
LG said its home appliance unit accounted for more than 60 percent of the company’s operating profit in the quarter.
LG’s mobile unit posted an operating loss of 44 billion won on sales of 15.3 million smartphones in the quarter.
That follows a 78-billion-won operating loss reported in the previous quarter.
LG has moved up plans to unveil a new flagship smartphone next month at Mobile World Congress in Barcelona.
Last month LG introduced a new premium smartphone line-up overseas but not in an Australia, the new models were promoted with an emphasis on video-shooting features to combat stiff competition.
“We thought hard over what it is that the company could offer customers in a way that is unique,” Juno Cho, the head of LG’s mobile unit said during a media event for the new phone, called V10.
But the prospect for any meaningful rebound in LG’s market share remains grim, as the premium segment continues to be dominated by Samsung and Apple-a trend that experts say won’t be reversible in the foreseeable future.
Mr. Cho and other executives stayed mum on the prospects of when the company could yield sizable profits from smartphones.
Analysts say LG missed the timing to make good inroads into the smartphone industry during the early years by taking too long in transitioning from cellular, second-generation phones to smartphones. Apple, with its iPhones, rakes in a bulk of the smartphone industry’s profits.