Things may not be going so well for LG’s smartphone business. The South Korean phone maker recently acknowledged that its current flagship offering -- the G6 -- has not sold as well as anticipated. According to the results of its latest quarterly earnings report, the whole company was able to register an operating income of $588.2 million on overall revenue of $12.89 billion. Sure, LG Electronics has managed to post an operating income that was an improvement over that of last year’s second quarter figures (increasing 14 percent compared to the previous year), but on other hand, its mobile business also recorded a loss of $117.27 million during Q2 2017.
As explained by LG, its less than stellar second quarter numbers for its mobile business can be attributed to the underwhelming sales of its high end smartphone devices, coupled with rising costs of device parts. It bears noting that during the first three months of this year, shipments of LG smartphones increased more than 10 percent to 14.8 million units, driven by the release of the G6 smartphone, which got rid of the modular design approach employed by its predecessor, the G5.
Interestingly, LG’s mobile business actually had a better quarter during Q2 2017 as compared to Q2 2016. During the second quarter of last year, the South Korean tech giant posted a loss of $132.10 million. But the problem is that during the second quarter of this year, the company’s revenue decreased by 19 percent compared to that of the same quarter the previous year. And considering that the other three core business of LG Electronics have posted improved revenues, the struggles of its smartphone business have become more glaring.
Still, there is some bit of good news -- in the North American mobile markets, LG actually registered sales that improved 13 percent compared to last year’s second quarter showing, due mainly to the phone maker’s variety of budget friendly smartphone devices. And it appears that the company is not letting up -- as a matter of fact, this year it has debuted a new Q series of smartphones, including the Q8, its latest IP67 rated handset. The competition among Android powered high end devices is bound to intensify in the coming months, with both Samsung and perhaps Google preparing to release their respective new flagship devices. As for LG, if it can keep it steady in the midrange department, it just might generate some new momentum to manufacture a recovery.
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