It’s that time again where LG posts their financial results, for Q2 in this case, which shows its mobile division to be making losses, for the fifth quarter in a row, despite the company changing its mobile strategy. In a nutshell, LG made sales worth $1.92 billion and an operating loss of 171.96 million between April and June, despite the launch of the G7 ThinQ and V35 ThinQ in May.
It sounds like an awful lot of money to be losing in a single quarter but believe it or not; this is actually an improvement because it was losing between $200 – $400 million almost every quarter of 2017.
“The second-quarter operating loss was largely due to contracting sales and increased marketing investments to support new flagship smartphone launches”
For the moment at least, it would appear that LG’s new strategy of ‘releasing a phone when it feels like it should’ isn’t the golden bullet that the company thought it would be. If anything, the strategy would appear to have made LG’s smartphone strategy even more confusing with the V30, the V30+, and the V30S ThinQ, all basically the same phone but with extra memory and or storage. Then we have the G7 ThinQ and V35 ThinQ handsets that launched back in May with similar specifications but different features such as the G7 having a notch while the V35 doesn’t. It’s almost like there are competing teams in LG’s mobile division competing for the chairman’s attention instead of concentrating on a single product and getting it right, first time around.
The rest of LG’s divisions are doing well with an overall increase of 4.1% in revenue thanks to its sales of premium OLED TV’s while operating income rose by a massive 44.1 percent year-on-year.
What can LG do to change the fortunes of its mobile division? Well, a mobile strategy that gives its next flagship, the V40, at least three months of open road before the company announces a new, iterative version that dilutes the brand and confuses the consumer would probably help some. One thing for sure, this won’t be the last quarter that LG’s mobile division posts a loss, and it can probably expect some added pressure on the cost of parts and materials thanks to the current trade dispute between the US and China which is set to rumble on for a while.