2016 has been a complicated year in the mobile realm and especially for the manufacturers and importantly, their bottom line(s). Samsung recently released its third-quarter results and in accordance with expectations, the South Korean company took a hit due to the Galaxy Note 7 and its safety concerns. Now, the other South Korean major smartphone manufacturer, LG, has also released their third-quarter results and like Samsung, things are not great.
However, when it comes to LG, they cannot attribute any blame to poor smartphone sales based on a smartphone that has been recalled and is no longer available to buy. In contrast, it seems LG’s issues stem solely from poor smartphone sales in general. In the latest quarterly results, LG is reporting an operating loss in the region $389.4 million and revenues of $2.3 billion. A figure which LG states is “23 percent lower than in the same period of 2015”. The reason LG attributes for the lower than last year figures is simply the “lower sales of premium devices”. LG goes on to note that over the period, the company did manage to ship 13.5 million smartphones and further notes that the US market contributed to a 14-percent sales increase when compared to the second quarter of 2016. So it is clear that things are not great over at LG's mobile division at the moment and to put things into perspective, LG notes that overall they saw third-quarter sales of $11.8 billion and an operating income of $252.7 million. So things for LG in general are not bad, it is just their mobile division that seems to be proving problematic. A notion that is not lost on LG as their announcement also details that their Home Appliance & Air Solution and Home Entertainment businesses were largely responsible for offsetting “sales declines and operating losses from Mobile Communications”.
Of course, to those that follow the smartphone industry closely this will not be too much of a surprise. The LG G5 is the current major flagship from LG for 2016 and was largely considered to be a poor-performing device in terms of sales and in no small part due to its modular direction. LG is of course now in the process of making available its other major device for 2016, the LG V20 and this will help to somewhat round out the 2016 losses for the mobile division. Although, it is unlikely to be a saving grace for LG Mobile in 2016.