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LG’s phone business is still losing money
Cell phones are one of the most popular consumer items in the world. It seems like everyone has one and no matter what the cost, they can all do some amazing things. Not only that, but people want to upgrade their devices often. It seems as though two years is the longest people are comfortable waiting and there’s also a rising trend of people who want to upgrade every year or even every month. Cell phones are so popular that they have spawned satellite industries like case manufacturers, repair shops, and online publications who write about them.
LG is one of the most popular manufacturers of cell phones in the world. They make other products like televisions, home appliances, and infotainment systems for vehicles, but many know them chiefly for making Android devices. We see its advertisements on TV all the time, carrier store employees routinely recommend its devices, and reviews almost always speak highly of them.
LG had no choice but to put a positive spin on these numbers. It points out that revenues are up eight percent from a year ago and four percent over last quarter. That $331.17 million loss is actually a 13-percent improvement over the third quarter in 2016 and smartphone shipments were up 44 percent over the second quarter domestically and nine percent in North America.
Sure, all of those numbers are great, but they’re also incredibly telling about how LG is failing. LG shipped just 13.7 million units in Q3 2017, down from a high of 59 million devices in 2014. Due to that decline, LG has only shown quarterly profits twice over the last two calendar years. You have to reach back to Q1 2017 right after the LG G6 released for a profitable quarter, and then it only made a $3.2 million profit. Before, that you have to head back to Q1 2015 when the company was riding the wave of a strong 2014.
It’s becoming increasingly clear that LG is being dominated in circles that it used to have a strong foothold in. The mid-range cell phone market has become very aggressive with companies releasing better and better phones at cheaper and cheaper prices. While LG does release phones aimed at the low and mid-range market, they’re hardly the first devices that people think of and face severe competition.
LG used to be a major player at the flagship level in the early days of Android. Samsung has pretty much taken over that market pushing aside not only LG, but companies like HTC, Motorola, and Sony too. LG will push its new V30 hard to attempt to regain market share and profitability. It’s already doing so by offering promotions and a lower price than its peers to entice customers to pick it up.
Do you think LG’s mobile division will survive? Are its phones compelling enough to help it rebound? Let us know down in the comments.