LG to have 2 smartphone flagships to face challenging 2016
Korean manufacturing giant LG has just revealed its financial performance for the last quarter of 2015. All in all, the company was happy to tell a mostly positive story, with an operating profit of 349 billion KRW, roughly $301.4 million), which is an impressive 27% increase from the previous quarter of that year. However, like its fierce rival Samsung, much of that profit came from businesses other than its mobile devices. Expecting rough seas ahead, LG is said to release two flagship smartphones this year to try and offset whatever sales problems it might encounter in 2016.
LG's Home Appliance and Air Solution company was named as the biggest winner of the quarter, reporting an operating income of 214.8 billion KRW ($185.5 million). This was largely thanks to LG's new TWIN Wash washing machines as well as strong sales in North America and Europe. In contrast, markets in South America, Middle East, and CIS showed slumping sales. LG expects that things will pick up even more once its new LG SIGNATURE line of ultra-premium appliances hit the market.
Despite the globally weak TV market, LG's Home Entertainment division did see some positive numbers, with an operating income of 109.2 billion KRW or $94.3 million. Revenues for that last quarter were up by 11 percent compared to the third quarter, to 4.74 trillion KRW ($4.09 billion). LG is also quite optimistic that the market is ready for more OLED TVs and 4K UHD TVs, which should help boost revenues even more this year.
In contrast, LG's smartphone and tablet business was a sort of "good news, bad news" affair. LG reported "strong" sales of 3.78 trillion KRW ($3.26 billion), which was a 12% increase from last quarter. Compared to last year, however, it didn't budge a bit. 2015 saw 59.7 million smartphone units shipped, not exactly sold, which isn't that much of a bump compared to 2014's 59.1 million units. Plus, it actually lost 43.8 billion KWR ($36.4 million) in operating income that quarter.
Like many other smartphone OEMs, LG also foresees a tough 2016, thanks to both premium models from rivals as well as tighter competition in the low to mid tier markets. This is compounded by the stronger push of Chinese OEMs like Xiaomi and Huawei in markets where the likes of LG are traditionally stronger, including the US. To offset these problems, LG will be putting out two flagship smartphones these year, following Samsung's pattern. That said, LG almost does the same thing already, or at least it once did. It would put out a G flagship, which is usually preceded by a G Pro model. Last year, however, it didn't announce a new G Pro. Instead, it debuted a new V line that could very well take the place of #2 in LG's high end lineup. This year, however, LG might be back to the G Pro scheme, with both a G5 and G5 Pro expected to be unveiled this coming MWC 2016 in February, with a full metal body build and a slightly modular design.
VIA: Korea Newswire