LG Posts Record Losses; Mobile Division Hemorrhaging
LG Electronics posted record operating losses in the third quarter of this year, led by poor smartphone sales from the struggling mobile division. Unlike American rival Motorola, which is showing signs of a resurgence after several years in the desert, the Korean manufacturer saw net profits fall 99 percent from the previous quarter, with the mobile business alone accounting for a reported 304 billion won operating loss (about $270.7 million). The division’s performance is so poor that it is dragging down better numbers produced by less troubled parts of the firm.
Just last month LG took steps to halt the bleeding by ousting then-CEO Nam Young for Koo Bon-joon, the younger brother of LG Group Chairman Koo Bon-moo. At the time, Koo was expected to replace other top executives including mobile boss Skott Ahn, so these lackluster numbers are obviously coming as no surprise to the company. LG has not had any breakout hits in the smartphone sector like it did with its Chocolate line of feature phones; even solid performers like the LG Expo have been relegated to business channels or otherwise denied maximum exposure.
The company hopes that its Optimus line of handsets — including the Windows Phone 7-powered Optimus 7 and Quantum and Verizon/Sprint/T-Mobile-bound Optimus One mid-range Android device — will reverse its fortunes in the coming quarter, but it certainly has an uphill climb to regain relevance. One saving grace for LG may be that hot-looking mirrored slate we just saw, a rumored Android model for Verizon sporting the beyond-3G speeds of LTE.
Source: JoongAng Daily