LG Mobile reports quarterly losses due to G5 marketing, expects sales growth

posted by Luis D. / Apr 28, 2016, 4:28 AM

LG Mobile reports quarterly losses due to G5 marketing, expects sales growth

In its quarterly earnings report, LG Mobile Communications reported a 3% sales decrease in addition to a 19% revenue drop since the previous quarter. It shipped 13.5 million smartphones, a 12% decline on a yearly and quarterly basis. The company cites lower overall shipments, less interest from North American carriers, unstable economics in the Latin America and CIS markets (which negatively impacted budget device sales), and LG G5 marketing expenses as reasons for the disappointing quarter it had.

All in all, LG had to write off $168 million. While the loss is offset by LG Electronics' $420 million operating profit, driven by its stable home appliances business, the company's mobile business is still a blip on the landscape dominated by Apple, Samsung, and nimble Chinese vendors like Huawei and Xiaomi.

LG hopes its investment in marketing the LG G5 will pay off in the second quarter.

Still, the LG G5 had only started hitting retail shelves by the time the first quarter was through, which means its influence on LG's sales is yet to be established. With an adequate investment in marketing behind it, the modular smartphone could motivate growth during the second quarter. Looking ahead, LG anticipates a global expansion of G5 sales and better budget model performance. As smartphone demand slows down, price competition among vendors will get even more intense, so the company is preparing a "cost-competitive value chain" to respond.

In February, LG revealed a new 'X' series of affordable mid-range phones distinguished by the presence of flagship features such as auxiliary display and dual cameras. It also trademarked more X-branded devices recently, although there's no guarantee that all or any of them will see the light of day.

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source: LG (.PDF) via The Verge

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16 Comments

1. ibend

Posts: 6747; Member since: Sep 30, 2014

as expected.. they're too greedy with G5's friends... they should bundle B&O DAC and camera module with G5 and sell it for $699.. and they shouldnt make G5 se.. and they shouldnt use LCD, it really doesnt suit always-on-display, they should use OLED/POLED

posted on Apr 28, 2016, 4:32 AM 6

4. blake8

Posts: 25; Member since: Jul 18, 2014

sales will keep declining thanks to G5 ugliest phone of the year. they should've stuck with same design as G4.

posted on Apr 28, 2016, 4:50 AM 6

9. maherk

Posts: 6746; Member since: Feb 10, 2012

They should go to back to the G2's design. Can't believe how LG never capitalized on the G2's success, one of the best phones at that time with it superb battery life, gorgeous design with those super slim bezels, and many other reasons why people believed that this is the phone that will help LG dominate the Android market. All they needed to do for its successor was a new sensor and change of materials for better build quality. LG needs their own project zero for next year, because this year, those who don't like Samsung will simply go for an HTC 10.

posted on Apr 28, 2016, 5:37 AM 6

11. Napalm_3nema

Posts: 2236; Member since: Jun 14, 2013

The G2 was far and away the best Android handset that year. I used that phone as a daily driver for 7 months, and every phone I bought to compare with it was sold or returned. Great battery life, good camera, great size, and it was a workhorse.

posted on Apr 28, 2016, 6:33 AM 1

12. bm985

Posts: 33; Member since: Apr 21, 2016

I agree, what they did to exploit is there strengths. The G5 is a nice phone, BUT standalone flagships, DON'T cut it anymore. The G5 should have been a continuation of the G4. And the current G5 aka Modular, could have been an additional model OR better a new series, ie M series (NO compromise on specs), the you add the V series. The and LG Class should have been upper mid-range. Plus stop limited availability. Samsung has done a great good of making varieties. LG should stop wasting money on the cheap speced phone (which unfortunately most of them of there new phone, other than the G5). Lots of potential, and there still time, do it while you are still relevant.

posted on Apr 28, 2016, 6:40 AM 0

18. dazed1

Posts: 789; Member since: Jul 28, 2015

LG G2 is a LEGENDARY PHONE! It put S4, and other pathetic excuses of phones to shame, even the S5 released long after, couldnt even come close to it, and yet they then released the G3, and now the G5?! facepalm.jpg

posted on Apr 28, 2016, 8:06 AM 0

20. HomerS

Posts: 419; Member since: Sep 19, 2014

Sorry but the S4 was amazing with the air comand and eye tracking features it had.

posted on Apr 29, 2016, 4:17 AM 0

5. bm985

since the g3, lg has not made the flagships and newer phones available. They put some effort with the V10 (great phone), but they went flat again. The G5 is a sweet phone, but its doing double and quattro battle with the leading flagships. Ie Samsung's 7, the S7 comes in two flavour, normal and edge, add that that the S6 and s6 edge, and edge plus. And Apples iphone 6 range, the 6, the 6s, 6 plus and 6s plus. See a trend. Anyways, they need to go all out, there's to much to gain. PLUS they NEEDDDDDDD some mid range power model, all the other model, are lower class models (with nice package).

posted on Apr 28, 2016, 5:07 AM 0

6. Subie

Posts: 2321; Member since: Aug 01, 2015

Saw the Jason Statham commercial on tv the other day. I found it amusing, but am never swayed by marketing like that.

posted on Apr 28, 2016, 5:24 AM 0

13. ibend

that commercial may suitable for japanese or korean taste, but it wont do well on western.. but at least its entertaining to watch

posted on Apr 28, 2016, 6:42 AM 0

17. sissy246

Posts: 7027; Member since: Mar 04, 2015

I hate that commercial and turn my TV WHEN it comes on, it sure as hell doesn't make me think I need to go look at the phone , but it's a ugly phone anyway. The should have done it more like the g4 with the leather back.

posted on Apr 28, 2016, 8:01 AM 0

7. FrankUnderwood2

Posts: 243; Member since: Oct 01, 2015

Marketing failed, sales will succeed???? Wow LG, you people are really changing the business mentality.

posted on Apr 28, 2016, 5:27 AM 0

10. jeevanand88 unregistered

There were times that the Lg handsets were too thin with bezels looks outstanding with other competitors. And now G5?! Really LG!! I think yu should really go back to keep your beautiful design... relaunch G2 and G3 with SD820... it will beat the sales of ur own G5 itself...!!

posted on Apr 28, 2016, 6:31 AM 0

14. ibend

yeah right, G2 and G3 have good design and screen-to-body ratio.. hope they learn something and make proper V10 successor.. (with better battery life of course..)

posted on Apr 28, 2016, 6:46 AM 1

15. jeevanand88 unregistered

Yeah!! I know its not nice to critizise the efforts the LG engineers put on to make G5 unique... but its really not nice to sacrifice some good design of its predecessors!! they can do anything they want, but elegantly wat they did with G2, G3 and V10.

posted on Apr 28, 2016, 6:52 AM 0

19. kiko007

Posts: 7493; Member since: Feb 17, 2016

Anyone else notice a yearly trend. 2014 it was the Galaxy S5 struggling. Last year it was HTC's M9. This year it would seem LG is in hot water. Hopefully next year we'll see something great from them in their Spring flagship (same as the other two). Sony needs to get their act together as well, but that's a comment for another article.