LG's mobile division has struggled for many years now, to get out of the red. Now it is banking on its first 5G smartphone to boost its revenue in the second quarter.
The LG V50 ThinQ 5G is the company's first 5G smartphone, which will be available on Sprint in the coming weeks - and in a few other countries. LG stated in its financial results for the first quarter of the year, that this smartphone is "expected to create positive momentum in the second quarter while the relocation of LG's smartphone manufacturing center in Pyeongtaek, [South] Korea to Haiphong, Vietnam will help improve profitability and LG's global competitiveness in the second half of the year."
It's a bit interesting to see LG moving its smartphone manufacturing center out of its home country, to Vietnam. But it does appear that it will save LG some cash and allow them to actually turn to being a profitable mobile division.
Given how few carriers are going to be selling the LG V50 ThinQ 5G, and the fact that only customers that have access to 5G are even going to be interested in this phone, one has to wonder what LG's thinking is, with thinking that this phone is going to help boost revenue in the second quarter. 5G is still in its very early stages, with only a handful of cities in the world, actually having 5G connectivity right now. LG may be banking on some big LG fans looking to get the LG V50 ThinQ 5G, since it has that triple-camera setup on the back, and it is now a flat back with a larger battery - when compared to the V40 ThinQ.
As for the rest of LG's earnings for the quarter, its net profit was down about 21-percent, compared to the year before. This was mostly due to the mobile division, which is still having trouble selling phones. As a whole, LG Electronics had consolidated sales of $13.27 billion USD. Operating profit was $801.25 million USD for the first quarter.
While net profit was down overall, its Home Appliance division did report record numbers for the quarter. With $4.86 billion USD in revenues, and operating profit of $647.3 million USD. That was the highest quarterly revenue and operating income for the unit in LG history. The Home Entertainment division had some pretty good numbers, though it was still a three percent decrease year-over-year. Coming in with revenues of $3.58 billion USD and operating profit of $308.27 million USD.
Finally was the mobile division, which saw revenues of $1.34 billion USD, and an operating loss of $181.05 million USD. LG says that it is continuing to rebuild this unit, but it's the only unit that is in the red right now. With home appliances and home entertainment divisions hitting a pretty decent profit.
Needless to say, it is a bit interesting that LG is banking on the V50 ThinQ 5G for boosting its revenues in the second quarter, even though the G8 ThinQ is going to be a much more popular device, due to where it is being sold and the price of the phone.