LG Not Giving Up Smartphone Business Despite Tough Competition With Apple, Samsung

LG Electronics’ smartphone business is evidently struggling this year. Despite the launch of its G6 flagship phone in April, the South Korean company has yet to see improvement in terms of phone sales. With the imminent release of its V30 phablet, it may seem as though LG’s market performance could significantly improve. However, analysts are doubting this, and they are also doubting the company’s chances of recovering from its losses.

This Monday, analysts told Korea Herald that LG’s mobile unit is unlikely to recover from operational losses following a 132.4 billion won or US$117 million loss in the second quarter. Previously, the electronics company was optimistic that it could turn its phone business around by launching the G6 after incurring losses for seven consecutive quarters.

It’s still important to note that LG’s losses have diminished compared to previous quarters. A Samsung Securities analyst even said that the South Korea tech firm could really reduce its losses this year. Unfortunately, this would still be not enough to see an improvement in its performance on the market.

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“LG will continue to reduce the losses to around 500 billion won to 600 billion won this year from last year’s 1 trillion won. Still, it will not be able to make a turnaround this year due to low brand value and less sales network,” analyst Lee Jong-wook.

LG’s V30 phablet is still to come. Though there’s much online buzz about the flagship handset, its performance on the market is very unpredictable. Moreover, it is bound to face tough competition against Apple’s highly anticipated 10th anniversary smartphone, the iPhone 8, and Samsung’s feature-rich phablet, the Galaxy Note 8.

While the future seems bleak for LG’s smartphone company, Samsung’s neighboring rival is still not giving up the fight. It will continue to move forward with its money-losing business, and it may already have devised a plan on how to slowly but surely make it work.

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“LG will find it difficult to seek a major breakthrough in the current smartphone market already dominated by Samsung and Apple and becoming saturated by Chinese rivals,” LG Economic Research Institute analyst Seo Ki-man said. “However, things may change in the future when the firm is fully prepared for the future market, which will see a generational shift based on artificial intelligence.”

As of late, LG is establishing synergy with its businesses by connecting its home appliances with smartphones. The trend of having smartphones control appliances via the internet or other connectivity modes has become very evident in the recent years. Industry watchers think that if LG continues to do this and branch out to making its smartphones control connected cars, the firm could successfully keep its mobile unit going for long.

For now, LG’s smartphone business is preoccupied with the upcoming launch of the V30. The device is going to be announced at the IFA exhibition in Berlin, Germany later this month, specifically on Aug. 31. It will then hit the U.S. market on Sept. 28. Preorders are expected to open on Sept. 17.