LG's mobile division lost over $850 million in 2019 as sales plunged

LG's mobile division lost over $850 million in 2019 as sales plunged
LG announced its financial results for the fourth quarter of 2019. But, rather disappointingly, its mobile division continued to bleed massive amounts of money and showed very little sign of recovery.

LG tried to reduce costs but losses widened

Smartphones from the South Korean brand generated KRW 1.32 trillion in revenue between October and December. The figure equates to $1.12 billion which, although decent, is down considerably from the $1.41 billion it generated twelve months earlier.

To make matters worse, the declining division also suffered huge losses during the quarter – KRW 332.2 billion, to be precise. It translates into $280 million over in the United States, an increase over the $270 million loss experienced in Q4 2018, despite LG’s claims about “reducing costs.” 

The results for the entire year were just as terrible. The mobile division generated $5 billion (KRW 5.97 trillion) throughout 2019 but experienced a whopping loss of $858.34 million (KRW 1.01 trillion).

Again, despite the company’s efforts to reduce costs, losses somehow increased drastically from the $650 million registered a year prior.

The company still thinks 5G will save its business

LG says its sales declined in the final quarter because of sluggish sales in overseas markets, largely due to a lack of demand for mid-range LG smartphones in North America. The increased expenses, on the other hand, were down to new product launches and efforts to clear inventory. 

The South Korean brand is expecting increase demand in developed markets this year for 5G flagships and new form factors such as foldables. It’s also anticipating “severe competition” in the mid-range segment from offensive pricing policies.

LG’s focus for 2020 is to satisfy for 5G smartphones, both in the premium and mid-range segments. Another aim is to increase “cost competitiveness” and grow sales by focusing on key specs, a major driving force in developing markets like India.

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