LG financial results show smartphone division losing money

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You already know that the mobile division of LG is in bad shape. The South Korean is notably making efforts to reverse this negative scenario, but without success.

This prolonged bad and low competitiveness phase of LG has even raised rumors that the company would sell its smartphone division soon, although the company presented a mobile phone with a scrollable screen during CES 2021. And one more detail shows how the business of telephony is complicated for LG.

The company released 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 such as the recent LG Velvet and LG Wing. Between October and December 2020 alone, losses were $ 222.93 million, and this is no less than the 23rd consecutive quarter in which LG’s mobile division is making a loss.

Among the causes of LG’s poor performance are the stagnation of sales of LG’s premium devices and also the failure to build a solid 5G strategy with affordable smartphones, while competitors already work with intermediaries with the fifth generation of mobile internet.

An example of this is Velvet, which illustrates this story. It’s a lot more expensive than other Chinese branded 5G phones, 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, value 9, 2% below that recorded 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 that demand for 5G will lead to greater demand for its cell phones, and that the level of consumption should return to pre-pandemic levels in 2021. Thus, the company should closely review the direction of its mobile business and, Once the direction is determined, share.

LG has been one of the main players in the cell phone market in the past decade and, even in recent years, has been responsible for important innovations, such as one of the most popular Android devices, such as the LG G2, one of the first with 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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