LG delivered more than twenty percent fewer smartphones in the past quarter
LG delivered more than twenty percent fewer smartphones in the past quarter than in the same quarter a year ago. According to the manufacturer, this is related to stagnating demand in the smartphone market and continued aggressive pricing among Chinese brands.
LG reports in the announcement of the quarterly figures that the number of smartphones sold has decreased by 21.6 percent compared to the same period last year. The number of smartphones sold has increased by 6.8 percent compared to the first quarter of this year, according to the company. Partly due to this decline in the smartphones sold, the loss of the smartphone branch amounted to 240 million euros.
LG attributes that loss to higher marketing investments for the release of new models and additional costs for moving smartphone production to Vietnam. The company does believe that the introduction of competitive smartphones to the masses and a growing demand for 5G products will contribute to improved performance in the third quarter.
The LG Vehicle Component Solutions Company division fared much better with a turnover of 1.1 billion euros, a turnover increase of 63 percent compared to the same period last year. LG says it has sold many infotainment systems with this part, and the increasing demand for electric cars has also contributed to this. This part still made a loss of 42.8 million euros, but LG attributes that to the initial costs that have to be incurred for setting up new projects and delays in setting up manufacturing processes for, for example, center information displays.
The unit responsible for the production of televisions saw its turnover fall by 4.5 percent to 2.8 billion euros. According to LG, this is due to declining demand in Europe and South America; The manufacturer attributes this declining demand to major sporting events that took place in these markets in the second quarter of 2018, so that the good sales of a year ago are now not being achieved. LG expects to see increasing demand for premium products in the coming quarter, such as LG’s OLED TVs and NanoCell LCD TVs.
The LG division that makes washing machines and refrigerators achieved a turnover of 4.69 billion euros, the highest result that this division has ever achieved. This is an increase of 16.1 percent.
Across the board, LG’s turnover amounted to 12 billion euros and the operating profit at more than 500 million euros. That is respectively 4.1 percent more and 15.4 percent less compared to the same period in 2018.