LG financial results show smartphone division losing money

You already know that LG’s mobile division is in bad shape. In particular, the South Korean is attempting to reverse this negative scenario, but without success.

LG’s long-standing bad and low stage of competition has even sparked rumors that the company would soon sell its smartphone division, although the company unveiled a mobile phone with a sliding screen at CES 2021. And one more detail shows how complicated telephony is. for LG.

The company published its financial results for the fourth quarter of 2020, and they show that the mobile division had a loss of $ 750.63 million for the calendar year 2020. That is, not even initiatives like the recent LG Velvet and LG Wing . Between October and December 2020 alone, losses were $ 222.93 million, no less than the 23rd consecutive quarter of LG’s mobile division making losses.

One of the causes of LG’s poor performance is the stagnation in sales of LG’s premium devices and also the inability to build a solid 5G strategy with affordable smartphones, while competitors are already working with middlemen with the fifth generation mobile Internet.

An example of this is Velvet, which illustrates this story. It is a lot more expensive than other 5G phones from the Chinese brand, and in the case of the Brazilian model, the chipset is the Snapdragon 845, from 2018. The company’s smartphone sales generated a total of $ 1.24 billion, worth 9 dollars. 2% below that registered in the third quarter, but 5% higher than the same period in 2019.

But the report does not indicate that LG will give up smartphones. This is because it believes the demand for 5G will lead to increased demand for its cell phones, and consumption levels should return to pre-pandemic levels by 2021. Therefore, the company must take a close look at the direction of its mobile operations and, once the direction is determined, share.

LG has been one of the major players in the mobile phone market for the past decade and has been responsible for significant innovations even in recent years, such as one of the most popular Android devices, such as the LG G2, one of the first to feature a QHD screen (LG G3), one of the first modular (LG G5) and started the trend of 18: 9 screens, the LG G6.

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