While other smartphone manufacturers are cheerfully reporting record sales figures in the smartphone sector, LG has once again announced a decline in sales in its final report for 2019. The mobile division continues to be a problem child for the South Korean company, while other divisions have grown.
LG today announced its 2019 sales figures including quarterly figures from Q4 2019. According to this, the company achieved new sales records overall. The Korean company has thus raised $53 billion of which $2.07 billion is profit. Although this is a ten percent drop off from 2018, the company has invested more in marketing strategies and new technologies, the company writes in its press release.
The overall loss of 10 percent is not so bad, but this is when you take into account LG's home appliance products, such as its popular televisions and refrigerators, etc. The picture for its mobile sector is much uglier.
Smartphones are costing LG $858 million a year
LG lists its LG Signature products and household appliances as the most lucrative division. While the South Koreans gained overall in the last quarter of 2019 compared to the previous year (1.8 percent), one area is likely to cause headaches again.
In the fourth quarter of 2019, the mobile division again recorded a year-on-year decline in revenues. LG generated sales of $5.07 billion with the LG Mobile Communications Company. Of which $1.12 billion was pulled in during the fourth quarter, three percent less than it made last year in Q4 ($1.6 billion). Losses for the full year of 2019 come in at at $858.34 million for LG... ouch!
As in the previous year, the reason for the decline is stated as "sluggish sales of mass-tier smartphones in overseas market". The loss could be attributed to increased advertising costs for LG's flagship business, the company explained. The company could possibly have saved itself the investment, though. When you look at the numbers, the LG G8X ThinQ was an expensive flop. The brand's confusing smartphone strategy is clearly not paying off.
We will certainly see where the journey for LG's mobile division in 2020 will lead at the MWC 2020 in Barcelona at the end of February. Let's hope things can take a turn for the better for the company.
What do you think about LG's smartphone business? How can it turn this around?