LG V30 Performed Well, Chinese Competitors Caused Losses, Company Says

LG’s smartphone business still makes big losses based on the company’s 2017 financial results. Nevertheless, the South Korean brand says its LG V30 performed well on the market.

LG took to its online newsroom Thursday to disclose its financial results for the previous year. Apparently, LG’s smartphone business has continued its losing streak. The company incurred Q4 losses amounting to RKW 213.2 billion or $192.33 million, which is up from the previous quarter’s KRW 375.3 billion or $331.37 million losses.

In its report, LG indicated that its mobile division wrapped up its financial year with full-year sales of KRW 11.67 trillion or $10.52 billion, which is down from the previous year’s $11.71 billion. LG said“a challenging marketplace and strong competition from Chinese brands” were the main factors why its smartphone business struggled in the past year.

TechCrunch pointed out that LG could be referencing Chinese phone makers Huawei, Oppo, Vivo and Xiaomi in its report because the latter brands mopped up marketshare across the Asian market thanks to their mid-range handsets that are capable of offering the high-end experience without the expensive cost.

LG also stated in its report that its LG V30 flagship smartphone had strong sales alongside its other premium offerings. However, a company representative explained to Korea Herald that “due to price rises in smartphone parts and marketing costs for the V30 smartphone, the deficit continued until the fourth quarter.”

LG is looking to see changes this year as its mobile division undergoes a major restructuring. Its adjustments to its timetable for new smartphone releases are also expected to help improve its profitability. At CES 2018 earlier this month, the company revealed that it will no longer follow its usual schedule for its new flagship releases, and it will not release new high-end handsets just because its rival companies are also launching new ones.

While LG’s mobile division continues to struggle, its home appliance business proved to be a force to be reckoned with. The company said this division helped it earn its greatest operating profit since 2009. LG reported its home appliance division revenues totalled KRW 19.23 trillion or $17.34 billion, which is 11 percent higher than the previous year.

Overall, the company posted KRW 61.4 trillion or $57.4 billion in consolidated sales for fiscal year 2017, an increase of 10.9 percent from 2016. This is a milestone for LG since it is the first time for the company to exceed KRW 60 trillion won or $56.04 million in annual sales.