LG has announced their earnings for Q2 of 2017, and they’re a bit sad. According to the company, their mobile division only made $2.39 billion in revenue, with an operating loss of $117.27 million. This compares to last quarter’s performance which resulted in a loss of $180 thousand, therefore allowing LG to nearly break even. But due to “weaker than expected premium smartphone sales and [an] increase in component costs”, the company hasn’t had the quarter they were hoping for.
Let me lay some analysis on your brain: personally, I believe LG is falling at this point because they have yet to do something interesting. If you look at what Samsung’s doing to compete at the flagship level, they’ve got this glass-wrapped Infinity Display with curves everywhere to show off to all of their friends. Sure, LG made the bezels on the G6 smaller and increased the screen size and chose an 18:9 aspect ratio, but the design of their phone looks boring compared to Samsung’s Galaxy S8.
They also don’t have a strong following like Samsung does. Whereas people wait for the next Galaxy, I have yet to meet someone who’s looking forward to next year’s G. And to take a step back to design, if a consumer walks into a carrier store and sees the G6 sitting next to the Galaxy S8, they’re gonna gravitate towards the S8 because it’s a whole lot prettier.
I think LG needs to realize they need to go big with future flagship smartphones. Look at Apple: they’ve been seeing decreased numbers in terms of how many iPhones they sell at launch. So they’re gonna try to do something this September with the bezel-less, AR-powered, face-detecting iPhone 8. If LG takes a page from their playbook, they may see a steady growth in sales and not have to worry about such major margins they saw this quarter. Otherwise, they’ll always be just LG and not a large contender in the world of flagship smartphones.
On the flip side, LG hopes the introduction of their Q series smartphones alongside the upcoming V30 will allow them to have a stronger second half of 2017. But when you look at Q3 and Q4 of 2016 when the V20 was introduced, they experienced even greater severe dips. And it was the same case scenario back then: the V20 wasn’t all that exciting, they didn’t market it properly, and the V-series brand has always been seen as something smartphone enthusiasts gravitate toward anyway. Why? Because that’s who LG targets. And by doing so, they don’t sell as many phones.
Who knows? Maybe LG will just flop at this whole mobile division and just stick with washing machines and TVs. The company’s home appliance and home entertainment categories both saw growths this quarter, and it doesn’t look like they’re gonna slow down anytime soon. Heck, even their vehicle components division saw a strong growth. Clearly, LG needs to get their smartphone game straight. I’ll hold out hope for them, but unless they do something big that will steal the market, I’ll probably withdrawl sooner than later.
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