Selling smartphones has become a low margin business for LG, based on its latest earnings report. The company posted an operating profit for the second quarter of just $172,000 for its mobile business. During the three months, the company shipped 14.1 million units, a 3% decline from last year's second quarter figure.
But the most incredible number is the 1.2 cents in operating profit that LG made per phone shipped. LG blames the results on weak sales of premium phones. Smartphone and tablet sales showed strong growth in North America, but sales in its own backyard of South Korea were weak. LG can usually count on strong domestic sales of its high-end phones.
The company also is spending huge amounts of money to market its latest flagship model, the LG G4. But the device is having a tough time competing with other Android phones like the Samsung Galaxy S6 and Samsung Galaxy S6 edge.
The results drew a mocking tweet from Carl Pei, co-founder and CEO of OnePlus. Pei sarcastically congratulated LG for earning less per phone than OnePlus made during the quarter. OnePlus, of course, is known for selling highly spec'd flagship quality phones at a value price. On Monday, the company introduced its high-end OnePlus 2 with the 64GB model priced at $399.99.
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Alan, an ardent smartphone enthusiast and a veteran writer at PhoneArena since 2009, has witnessed and chronicled the transformative years of mobile technology. Owning iconic phones from the original iPhone to the iPhone 15 Pro Max, he has seen smartphones evolve into a global phenomenon. Beyond smartphones, Alan has covered the emergence of tablets, smartwatches, and smart speakers.
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