LG’s 3rd quarter profits are up 82% as smartphones actually lose money

LG’s operating profits for the 3rd quarter were 516.1 billion won (about $454 million) and revenue was up by 15.2 percent at 15.23 trillion won (about $13.4 billion). Unfortunately, LG’s mobile division didn’t contribute a dime. The bulk of profits came from high-end home appliances and televisions. LG had a big comeback with smartphones in 2017, at least from a critical standpoint, so hopefully that division can become profitable at some point.

LG’s mobile division actually performed terribly with an estimated loss of 200 billion won (about $174 million). While the lauded V30 has only just launched, the well reviewed G6 from late March hasn’t sold well. Competition from Samsung’s Galaxy S8 and S8+, among others, were just too formidable. LG continued the fight by also launching cheaper alternatives to the G6 with their Q6 line in July. Both lines offer near bezel-less screens with the new 18:9 aspect ratio and undercut Samsung’s 2017 flagships’ prices. Unfortunately, none of that helped move the needle forward.

It’s possible that the new V30 could help their bottom line in the 4th quarter (October to December), but like the G6, it’s facing very tough competition. Samsung’s Galaxy Note 8 has already proven to be a hit and LG’s own Pixel 2 XL with stock Android 8.0 Oreo could pull consumers away. The highly anticipated Huawei Mate 10 series is also launching on October 16th, with a design and features similar to the V30.

These financial problems are not unique to LG’s mobile division. HTC, Sony and other large manufacturers are also struggling. Very few companies, such as Samsung and Apple, make significant profits from smartphones. Even Microsoft has thrown in the towel.

Source: Android Authority


About the Author: Erik Slaven

He was born and raised in Virginia, but escaped to Southern CA. Started out as a BlackBerry addict until he bought HTC’s Droid Eris and never looked back. He's owned dozens of Android devices and can rarely settle on a daily driver for more than a few months. He's currently using a Galaxy S8 and BlackBerry KEYone. He rides motorcycles for fun and would live on the beach if it was legal. Marketing and freelance pr help keep the lights on.