What you need to know
- LG just posted its Q4 2020 financial earnings, and they don't paint a pretty picture.
- The company lost over $750 million in profits throughout 2020.
- LG continues to contemplate exiting the smartphone market.
Rumors have been swirling around the possibility of LG exiting the smartphone market after years of unprofitable results. While the company previously denied that this was the case, recent reports suggest that the company has been looking for buyers and may have found one. Meanwhile, the company's most recent earnings report has just been released, and things don't look any better for LG.
While LG reported a 5% increase in YoY sales, the company still saw its smartphone sales fall 9% from the previous quarter which it blames on a shortage of 4G chips. Operating profit also dropped nearly 18% from the previous quarter, and more than 16% for the calendar year, amounting to over $750 million in lost profits from the mobile division alone.
LG didn't have the most active year, and unfortunately, the best LG phones couldn't make up any ground this year. The company did take a moment to tease its long-rumored LG Rollable smartphone at CES, but given the state of its mobile business, the future launch of that phone is now put into question. After all, the company does like to hype up its smartphones only for it to fail to market them adequately once released.
But while the company might be having a hard time getting its mobile division off the ground, the company has been an integral part of the Android ecosystem from the beginning, and losing LG wouldn't be good for anyone but LG. Let's just hope it doesn't come to that.
The LG Wing is the world's first 5G swivel smartphone that features a novel form factor with a dual-display perfect for multitasking on the go. The rear triple camera setup takes excellent photos, with a dedicated gimbal mode for creators.
Derrek is a long-time Nokia and LG fanboy who loves astronomy, videography, and sci-fi movies. When he's not working, he's most likely working out or smoldering at the camera.
Android phones are almost a commodity business. Samsung and Google can command a premium for the brand, but most other brands like Moto, LG are competing on features and price, with no premium for their brand. The features are all widely available (screen, processor, ..) so there is no sustainable advantage for anyone. This kind of competition will inevitably drive out everyone except the low-cost producers. So the future for Android is Samsung, Google, and a bunch of inexpensive phones made in China or Vietnam with low cost and low service levels.
Almost a billion dollars in operation lost. Imagine if they even spent a third of that on proper advertising leveraging their strengths compared to SamApple (like a #payingmoreformorenotless campain), strong PR and customer service, and proper booths in stores; seriously, LG flagship phones are usually bunched up with cheap phones to collect dust, and the K and Stylos they actually sell are not available in every Best Buy or T-Mobile near me.
Now imagine they actually updated their phones at least on the same schedule as Samsung. Seriously LG, why spend all your money on your TV's and appliances and leave no support for your mobile division.
Why is it a surprise that they lose money when, however good their phones, and they are good, they make no effort to sell them? Try and buy one in the UK and you will get the point.
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