LG confirms disappointing G5 sales - Mobile World Live

LG confirms disappointing G5 sales

28 JUL 2016

LG Electronics confirmed “somewhat slow initial sales” for its flagship G5 smartphone, as it reported another quarterly loss for its mobile business.

The unit operating loss of KRW153.5 billion ($132.10 million) compares with KRW19.2 billion in the same period a year ago, but was better than the KRW202.2 billion seen in the prior period. Sales of KRW3.33 trillion were down 6 per cent year-on-year, but up 12 per cent sequentially.

LG’s Mobile Communications business has not reported a quarterly operating profit since Q1 2015.

In addition to the sluggish G5 volume, the company noted increased marketing expenditures.

The new flagship is an important device for LG, which has struggled to get out of the shadow of its bigger South Korean rival, Samsung (which today reported a bumper mobile profit, driven by flagship sales).

While LG adopted a new modular design for the device, and had a high-profile launch at Mobile World Congress, the company is suffering the same woes that have affected most of its other key rivals in the premium Android space.

Its performance in the domestic market suffered badly, while North America was also tough.

Total smartphone shipments of 13.9 million units were down 1 per cent year on year, but up 3 per cent from the prior quarter. Mass-tier sales improved by 8 per cent year-on-year, driven by its K and X series lines.

The company acknowledged that the next quarter will be “challenging”, due to the weak G5 performance, and it will “strongly implement profitability improvement activities”.

“The launch of the new V series and expanding sales of mass-tier K and X series models are expected to improve the business unit’s performance next quarter,” it said.

Away from the mobile unit, LG reported a group profit of KRW268.5 billion, up 18.6 per cent year-on-year, on revenue of KRW14 trillion, up 0.6 per cent.

The company said its Home Appliance & Air Solution and Home Entertainment units both reported their highest quarterly operating profit in LG’s history.

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Steve Costello

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