LG Smartphone Sales Up 31%, Holds Steady In Appliances
In Q2 2020 LG’s smartphone sales increased by 31.1% quarter-on-quarter to hit 1,309 billion Korean won (A$1.53 billion), but the segment is still running at a loss, with an operating income of -207 billion Korean won (A$240 million).
The uptick in LG smartphone sales was primarily driven by the domestic and North American market.
LG is hoping to turnaround its smartphone business in the next quarter with the global launch of its new Velvet model, which will be rolled out in Australia in coming weeks. While the Velvet smartphone launch will increase marketing expenses, LG expects the smartphone segment to be more profitable in Q3.
“Global demand is expected to partially recover after hitting a low point in the second quarter, but competition will intensify as manufacturers start to launch new models and expand mid-end lineups in consideration of customers’ price sensitivity,” LG stated in its earnings report.
Overall, LG’s sales fell by 13% to 12,834 billion Korean won (A$15 billion), but there were some bright spots for the company.
In home appliances and air solutions, LG recorded a profit of 628 billion Korean won (A$730 million), representing a y-o-y increase of 12.2%.
Home entertainment profits were up 5% y-o-y at 113 billion Korean won (A$130 million). In the quarter ahead LG plans on focusing marketing efforts on boosting the sales of premium TVs such as OLED, Nanocell, and large-size TVs as global TV demand recovers.