Competition From Chinese Brands Too Intense – LG Laments

In recent years, the global smartphone market has been flooded with numerous manufacturers and products. Under the current circumstances, a handful of domestic smartphone makers and some veteran international manufacturers have been thrown down the pecking order in the industry. South Korean manufacturing giant, LG is one of such companies whose mobile business have been primarily affected by the competition. Although the company is still active in the global market, its performance is really not good and if the company doesn’t carry out some reformations, its days in the smartphone industry are numbered. Recently, LG lamented that under the pressure of “fierce competition from Chinese brands,” LG’s mobile phone business had to struggle. But LG Mobile stressed that its high-end smartphone LG V30 still has good sales.

We reported earlier that LG’s mobile business suffered a huge loss in Q4 2017 although this loss is smaller than its Q3 2017 loss. Nevertheless, consistent failure in its mobile market QoQ shows that the company is struggling and it probably needs some changes. In fact, LG’s mobile business has not made any significant profit over the past two years. Last year, it only made a profit if $3.2 million from Q1 and its total sales hit $10.52 billion which is lower than its 2016 $10.98 billion sales. In contrast, LG’s overall profitability is still solid. Last year, it made a profit of about $2.23 billion which was its highest ever since 2009. In the fourth quarter of last year alone, its household appliances and television business recorded operating revenues of 383.5 billion won, or about $ 345.66 million. Under these circumstances, LG will most likely have some new considerations for its handset business if it ever hopes to make it to the top again.

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