LG Electronic’s mobile business continued to weigh on its overall performance, as Q2 sales dipped due to stagnant demand in the smartphone market and increased competition from Chinese brands.
In a statement, the South Korean electronics company said Q2 revenue at its LG Mobile Communications unit decreased 21.3 per cent year-on-year to KRW1.6 trillion ($1.4 billion). The company put the fall down to “continued aggressive pricing by Chinese brands” and a slowdown in the smartphone market overall.
The revenue dip was accompanied by an operating loss of KRW313 billion, representing another quarter in the red for the devices business, which it put down to higher marketing investment to support new models and additional costs related to relocating smartphone production to Vietnam.
During the period, LG’s V50 ThinQ 5G device launch gave it some headway in its home market. In June, it said it racked up 100,000 sales of the device in the first week of launch.
However, sales appear to have dropped off, as competition from rival devices, including the Galaxy S10 5G, increased.
LG said it expects an improved performance for the unit in the third quarter, driven by “the introduction of competitive mass-tier smartphones and growing demand for 5G products”.
At group level, its poor mobile performance, as well as declines in vehicle components sales was offset by strength in home appliances and business solutions.
Revenue for Q2 hit KRW15.6 trillion, a 4.1 per cent increase from Q2 2018, but operating profit dropped 15.4 per cent to KRW652.3 billionSubscribe to our daily newsletter Back