LG's overall profit margins take a hit as mobile unit posts a $117 million loss.
LG's mobile unit recorded a strong 10% increase in sales in Q1 2017, but the resurgence was short-lived. In its second quarter earnings, LG noted that its mobile unit recorded a loss of $117 million (132.4 billion won) on revenues of $2.39 billion (2.70 trillion won).
LG attributed the decline to weaker than expected sales of the LG G6 combined with an increase in component costs. The G6 is LG's strongest showing in years, but it looks like it wasn't enough to mount a significant challenge to the Galaxy S8.
The South Korean company saw more momentum from its budget devices in the North American market, with sales increasing 13%. LG is now counting on the introduction of a new high-end model — likely the LG V30 — to boost sales in the premium segment next quarter. The company will also launch a new model in the Q series in the coming months.
LG as a whole netted a revenue of $12.8 billion (14.55 trillion won), a 4% increase from the same period last year. Operating income of $588.2 million (664.1 billion won) was 13.7% higher than Q2 2016, with LG's other business units — home appliances, home entertainment, and vehicle components — posting healthy profits. The home appliance unit saw a 12% hike from Q2 2016, and the vehicle components division, which supplies telematics components to the Chevrolet Bolt, saw a 38% increase in sales.
With the mobile unit once again in the red, LG now has to rethink its strategy in the smartphone segment.
Reader comments
LG's mobile unit sees a sales decline in Q2 2017 as demand for the G6 wanes
Actually LG got a few features right , long before Samsung .
V20 and G6 both shipped with Nouget with no real issues ..Sammy didn't til S8 .
V20 and G6 had dual cameras ...Sammy is 'introducing ' on Note 8
V20 and G6 had capacitive buttons on front and power switch/fingerprint reader on back .. Sammy has now adopted with release of S8
V20 and G6 had Always On display (or 2nd display) ..Sammy has adopted as well
Sammy and Apple have been trying for a few quarters now to get on screen fingerprint reader working ..it maybe deployed on V30 and NOT be offered on NOTE (cause they have that NEW dual camera anyway)
So much of what is discussed today is LG bad Samsung good ...look how much decent product LG has been able to get out in the last year compared to HTC or Pixel and its clear that Samsung is ahead of them all , but LG has passed the others as well ..
Kenny
Wish this would go down to 325.00 new unlocked..
Read people !! First the cameras on the G6 are top notch. Second the G6 is much less $ than the S8 do some research before you say things that just are not true. G6 is a great phone for a great price. And I don't see Samsung giving you a free 43 " smart tv for free and a Google home assistant. The phone may as well be free. Some of you make me wonder if you are just spoiled rich and buy what your rich friends buy , or just too ignorant to do some research ??
The camera is barely passable for a 2017 flagship. It's the worst camera on a phone this year.
The price, is great. and AT&T just dropped the price where it costs less than a Galaxy S7.
The camera is NOT "top notch" its barely better than a Moto X from 2014.
Top Notch is HTC U11.
Samsung lol. I would not trade my G6 for an S8. People are so ignorant. Like lamb's to the slaughter. Don't judge the G6 till you actually own one for a few months. Lg low end phones ? I highly doubt it. Like Samsung has never made an explosive device !! I wonder how many a testicle was lost to the note7 ? S8 overpriced device people purchase to look cool. News flash : keep that $300 difference in your pocket, you may need it.
too bad. this phone has been better to me than the s7 edge. this coming from someone who was a victim of the boot loop 3 times in less than a year. i didn't think i would get another lg phone, but at $300 with no contract, it was worth a try.
all has been said Dear LG plz put ur house in order. stop making those silly compromises wen the competition is taking a different route
No ****, decided not to compete with high end flagship and crappy decisions like last year SOC, only 32 GB storage, stupid region based feature set. Glad that G6 is a flop. Try better with V30 or G7 without making same stupid marketing decisions.
Agreed. The G6 sucked. They failed on every level: paltry storage, no audio chip AND horrid camera performance (DxoMark 84 -- godawful). I had it. The photos seemed worse than my G4 and V10. Samsung's and the U11 are leagues, leagues better. For LG to win, increase internal storage, focus on audio output (and keep headphone jack), and up camera game mightily. I would also ask for better design. I have not been inspired by the V20 or G6. The V10 was a phone that wowed me on design.
I picked up the LG G6. My verdict is its ok. if you want a great camera get the LG g6 UM the rest is mediocre and mundane.
Better then the One plus 5 yes.. but the rest of the top tier phones? How is it better then the One plus 5. Two words Camera, and screen .
One plus thinks an Iphone clone with a 1080p screen is worth 500+ [REALLY?] You can get the LG G6 for 480.00 on Tmobile.
My other half wont touch LG NOW.. She loved the LG G4 with the leather back, but after Bootloop heck no.. and with there customer service issues she wont touch LG appliances either... We shall see if LG can fix there damaged reputation. I got the two year warranty with the LG g6 im hoping I wont need it.
so at $500 (1+5) you get
Snapdragon 835, 8GB ram, 128GB storage
1+5 at $480 you get:
Snapdragon 835, 6GB ram, 64GB storage
LG at $480 you get:
SnapToaster 821, 4GB ram, 32GB storage
So LG thinks that because the screen is higher res, yet the camera is downright terrible, it is worth near $500? {REALLY?}
Not to mention the stingy 32GB, last gen parts, and 4Gb ram,. and the fact that it is $584 on AT&T. so its worth near $600? {REALLY?}
The G6 should be a $399 phone unlocked.
Don't get me wrong. I think the 1+5 is pure garbage as well, but you were comparing prices for what you get.
I can't help but think that LG's failure to respond to the whole boot loop debacle has skewered their reputation. And they're compounding the problem by taking away the features that helped them stand apart from the rst of the market.
I can't help but think LG's poor response to the boot loop debacle skewered their reputation and now they're compounding it by taking away the very features that made their phones stand apart from the rest of the market.
From having a nexus 6p bootloop on me recently, I could see where LG's documented bootloop issues are hurting consumer confidence in their mobile division. Since I'm in the market for a new device now, normally I wouldn't consider the G6 even an option because of their past issues, however having a 2 year warranty on their products now makes me seriously consider getting this phone because I can't think of another company that has that kind of warranty on their phones.(At least in the US) I think they should be marketing that more given their issues with other phones in the past in an effort to regain consumer confidence. It also doesn't help them that you can get an unlocked s8 cheaper than you can the G6. Their price I feel needs to come down a little bit.
I had it. it's not a great phone. If one cares about camera performance, avoid the G6 at all costs.
Not surprising given previous bootloop issues and the fact that it's vastly overpriced. Only Apple and Samsung can charge Apple and Samsung prices.
Lg Mobiles head doesn't know how to be a leader in mobile. It has been proven time after time. LG has the components and know how to make a successful phone but the complete package always falls short due to the final decisions.
Lg ran into samsung's juggernaut around the same time, with the same idea. It hurt that sammy had a newer processor, than LG.
I don't believe that there is no profit in the budget segment. In fact the competition is intense in that segment with most of the big names represented. Even Iphone is now a player with their older year models and the SE going for under $200 dollars and the 5s for less than$100. Has to be a reason.
I'm getting rid of my Samnsung Galaxy S8+ out of spite and anger at Samsung for screwing me on the tradein scam, forcing stupid Bixby down my throat with a button and software I dont' want and cant remap or opt out of, and that damn fingerprint sensor speed and placement suck!!
I am going to give LG another try with the V30 if they get the specs right, even though my G4 had the bootloop issues. G6 wasn;t for me bc of the outdated processor that I have in my GS7 Edge from 2016. I am hoping the V30 has SD 836, IP68, wireless charging, high end DAC.
If LG can fix their camera performance issues, I might consider it. Based on the G6, I am very skeptical.
Samsung doesn't "scam" people on trade ins. You likely didn't ready anything but the line that said "trade in your phone and get credit"
never mind the entire page full of terms and conditions. And the STRICT 15 day time line to get your old phone to them.
samsung.com/us/trade-in/terms-and-conditions/
Although it doesn't say specifically, they probably don't except phones that have been rooted with some hack job OS either.
I would guess anything that "voids the warranty" would be unacceptable.
You don't know what your talking about. I sent them an unrooted, unused Nextbit Robin in mint condition in the manufacturer box. I read the entire agreement and all the fine print and I met all the conditions. The scam aspect is the timing and what amounts to the wholesale rejection of qualified tradeins that are rejected and my account charged only after the 15 return window of the galaxy S8+ has elapsed. In the interim, after 3 phone calls and 2 escalation tickets demanding my $175 be refunded, I have been told twice it was their mistake and they are trying to figure out what happened instead of just giving me my money back. I'm supposed to call back again next week, a month after the fact to argue for my money again. There are likely people who will give up in this process. I will not. At best this is gross incompetence by Samsung and its contactors handling the returns and a poorly thought out tradein program, and is more egregious in the wake of the Note 7 PR fiasco. They don't give a crap about customers, like many corps with large profits,unless they are forced to.
Many good points made by people though I wonder how much impact they affect Mr./Mrs Ordinary People on the street.
Here is my take to improve LG sales:
1. Publicity/Ads: Gotta get the word out there much more than its current level. Gotta put in more money. Make the ads focus on routine tasks that everyone loves to have in their ideal phones: take pics of their kids on the playground and share, share-watch videos of their latest vacations, swap battery when traveling or on a trek (where an outlet is not possible), etc.
2. Uniformity: no regional crap. So silly. Make it simple for everyone everywhere knows that they get the same features when they buy LG.
3. Keep features somewhat distinct between G and V lines. You blur the lines, you blur consumer understanding about your brand and products. Simple as that. And the last thing you want is to confuse consumers. When confused, people will go elsewhere.
LG just cheapened out on the G6. Half the internal memory of the S8. Terrible Sony-esque' marketing. Really needed something to market the G6 as an alternative to the S8. Play to G6's flat screen or twin cameras features. The G6 is a good phone that should have been great. Or at least able to present itself as a non-compromise alternative to Samsung.
"LG attributed the decline to weaker than expected sales of the LG G6"
Then maybe they should stop expecting consumers to be OK with being treated differently just because they live in country X instead of country Z. Microsoft's almost non-existent Xbox userbase outside the US should have taught them that.
"With the mobile unit once again in the red, LG now has to rethink its strategy in the smartphone segment."
I can think of some easy ways to do it.
1 - Stop market segregation
2 - Streamline your portfolio
3 - Stop trying to shove big-arse phones down people's throats.
4 - Make sure your after sales support isn't terrible.
These four things would help you a long way.
Oh and stop announcing phones and then shut up about them. That LG G6+ for example. It got announced, NO clear information was given whatsoever about markets it would launch in, prices or availability...and not a single word on whether the stupid region segregation would continue.
well said
I love my G6. I think part of the issue is all the promos they ran to try and sell them. I know I only bought mine due to the bogo I got, so they sent me a $500 check to cover the cost. Multiply that by a few 10's of thousands and it adds up.
G6 is a great phone, but the damage to their phone brand has already been done, thanks to the bootloop issues.
The G6 should've been the same across the world; wireless charging and Quad DAC both included. I would've bought one if that were the case.
I can't stand this regional exclusivity crap.
Same here. I would even overlook the lack of an AMOLED screen IF they had given me the same phone that had the features other markets got...not that shitshow that is the European version of the G6.
I don't get why this is so hard for LG. G6 could have been a success - IF:
* No regional crap - give me all features, especially that DAC
* No stupid 18:9 screen
* Removable battery of decent size
* Waterproof
* Current gen processor
* Commit to 2-3 years of software updates
I'd have grabbed one if most of the above had been met. But as it stands today - the ONLY thing I would gain over my Z Play is a better camera. Not worth the investment
The G6 is IP rated water resistant, isn't it?
I like the 18.9 screen. Makes it a joy to hold compared to the G4 I had.
The G6 is waterproof.
Also, how can you make the phone water proof in addition to having a removable battery?
Well, the S5 Active has a removable battery. But I think they realized they're door gasket didn't cut it, so the newer Actives all have sealed batteries now. I've never dunked my S5A, but it has gotten wet with no adverse effects. Too bad it's slow as crap... Actually want an LG G6 to replace it!
I agree with you on the screen ratio. Removable batteries are thing of the past though.
I like the idea of two years of software updates and two years manufacturer warranty.
I dont understand why they don't just shift their launches by 2 or 3 months. why go head to head with Sammy? both the G and V series come out roughly the same time as the S and Note. Shift it by a few months, and hope you find a sweet spot.
Any idea on actual sales numbers for the G6?
According to my buddy at best buy folks just don't buy LG premium phones . Theres only two brands that folks fill is worth 800 and we know what they are . Now the budget carriers like boost mobile do pretty good with LG low end phones . But there's little to no profit in that market. And those same folks, when they are able to afford a flagship it's almost never a LG are HTC. The last LG that had street cred was the g3
If the UK version had the audio and wireless charging features available elsewhere in the world I would have bought one.
LG can't compete with Samsung, they tried to launch their phone before the S8 cause they knew it.
LG marketing is really lacking, Samsung marketing is amount the best i ever seen, no wonder everyone flogs to buy S8 and not looking left and right.
I really haven't seen the G6 advertised anywhere. It's a shame.
The issue I feel is that they really aren't giving this phone the marketing push it deserved.
It also launched in some markets either very close to or after the launch of the Galaxy S8 and the whole regional thing never helped as well.
I feel that the G6 was an "audition" to Google for the Pixel XL 2. Perhaps, it was never really about competing with Samsung or selling a comparable number of devices. It was LG showing Google what it can do in terms of hardware, design and build quality. The goal was to make a great looking device, with a fantastic camera, and demonstrate what could be done with an older processor and software optimizations. My experience with the device has been stellar since May 1st.
The design language of the G6 demonstrates that LG can make an attractive device that doesn't need curved edges. A bunch of Pixel 2 XL renders really show the similarities between the design.
Of course its an unsubstantiated hunch as to why more attention wasn't given to the G6, but at this point we know that LG is paired with Google on the Pixel XL 2.
As far as I'm concerned, the V series are the flagship devices, which the G series are the high-end mid range devices. Great performance, great dual rear camera, smooth experience, wireless charging, and IP rated at an affordable cost. Why spend resources on marketing a mid-ranger next to the likes of an S8? Perhaps LG is ramping up for the V30.
I wouldn't say the G-series is a high-end midranger.
If anything, I feel the G-series is the mainstream flagship, while the V-series is the other flagship line for the type of people who wants power and capabilities.
Yes, the marketing push has been missing. The other factors are that lots of phones have dual cameras now, and the G6 is handsome, but not what I'd call stunning. For techies, there's last year's processor to deal with as well, and the G6 does not have the V20's audio chops either. It's an excellent phone, but does not have a lot going for it in terms of standout features.
Guess I'm the outlier here, just picked up a G6. Didn't like that I can't hold the S8 the way I want due to the edge screen. G6 is more comfortable to hold. I do agree they should have had one spec set worldwide. Plus they made the US warranty match the European, 2 years, which is a step in the right direction.
In addition to lack of advertising, they need to push to get their phones more prominent in stores. In any stores that do carry it, they're rarely easy to find! On top of that, if you go to Wal-mart or Sam's Club to look for phones, you see: iPhones, Galaxies, and an LG.....X Power. Seriously. Go look, I'll wait.
Back? See, told you. Why the F do they carry cheap crap LG's, but not the G6 or V20? Even if people don't buy at Wal-mart, it's serious advertising when you're looking for phone. I use my wife as an example of "the general public", since she's very tech-averse... She knows exactly what an iPhone is (duh), and knows that the newest Galaxy is the S8. I mentioned wanting to buy a G6, and she just had a blank stare, followed by, "Like, the car? We're talking about phones, and you don't need another car." So obviously, LG has done almost no advertising.
From the perspective of previous Lg phones owner - G2, G3, G4: overheating issues, motherboards failures due to poorly soldered cpu, bootloops, yellow marks on screens, battery issues, kernel issues, very late upgrades... Enough is enough. Now they will need at least a couple generations of phones without any massively reported issues for ppl to start even considering them again
I agree, and the failure of the G5 modularity idea hurt. I wish they would have kept the little robot cam thingy though, and just use a app to control it(with AI this would be a hit), the commercials for it were interesting.
The G6 is a good phone that could have sold more if they had just given the same specs to all markets. The UK version didn't get the wireless charging that was on the US version or the larger storage and high quality DAC on the Korean version. The fact that we got a downgraded version of the G6 meant a no purchase from me.
Couldn't agree more. I still bought and loved the G6 but I was peaved at having less features for more money just because I'm in the UK
Exactly what I was going to say. It's so foolish of them to have done that. I would likely be using a G6 instead of an S8 if they had bought the DAC to the US version.
on my G4:
Bootloop issues (had to be sent back)
No software upgrades for nearly two years! Still on 6.0....
battery shocking
so i would not buy another LG I am afraid!!
In regards to your last sentence. I'm may be upgrading from a Nexus 6 when the Pixel 2 becomes available. If the rumors are true that LG will be making the Pixel XL 2 I may pass and hold on to my Nexus 6 for another year.
I like LG and the G6 isn't bad. but I know lg will abandon the software on it before its 6 months old.
That is why they don't sell phones. people that bought lg phones don't go back for that
Samsung and Apple have got a very strong mindshare at this point. They also deliver their devices relatively soon after launch. The other companies can take a very long time and that is never good because people move on.
On Android a lot of people just think Galaxy and nothing else.
Yeah, the utterly ignorant do.
They make an awesome TV but the cell phones don't come close to what Samsung has done.
HTC... LG... Who's gona be the next ONE+?
Htc is making a comeback. They're coming with a cutting edge design and new features. My money is on lg going budget phone
LG already has budget phones.
It's tough to overcome Samsung's advertising budget.
The g6 is a nice phone, but 32gb storage and a hard to find 'gotta have it' feature, makes it a challenge to sell against a marketing monster. Reminds me a bit of the HTC 10.
It's not only the advertising it's the phone itself. There isn't really one way the g6 is better. Processor. Camera. Battery. Screen. Design. No vr support. Doesn't turn into a PC when you put it in a dock. I want lg to be successful but the phone isn't even in the same realm. And they used a last year processor which is a no no
Design is entirely subjective and I prefer the LG G6. Why would I want it to turn into a PC? I have a PC for that. As for the camera, I think at the very least they are equal...the G6 edges out the S8 in several areas. They both have strengths and weaknesses, but neither one has a big enough advantage. My own decision to go G6 over the S8 was from a practicality standpoint. The G6 felt more solid and I just can't get behind the curved screen. I've heard so many instances of the S8 screen cracking easily and it being notoriously difficult to get screen protectors that work well on the curve. It also helped that I saved about $200 buying the G6...
Same, curved screen is a turn off, I tried the s8 but returned it. Glad I did as it sounds like Sammy would've denied my iPhone 4 trade in! Couldn't do the S7 edge either. Loved my note 5 and S7 flat, besides quick battery degradation. Using G6 now, us997 unlocked version, and it's great, no bloat, quick and snappy. Also, official unlockable bootloader if/when I want.
I was about to give my money to LG but I cannot go back to 32GB when my 2 years old phone already had 64GB of storage. They should Have released 32GB, together with 64GB. i would have purchased the 128GB if it was available.
Agreed. I just returned my 64gb U11 when they announced the 128gb / 6gb RAM version releasing shortly.
If LG didn't take away features that fans of previous G series phone liked then maybe the G6 would have sold better.
I doubt it. The changes they made were for the better. Buttons (minus the FPS) on the back are just stupid
This is a ridiculous statement. The last two phones in the G series lost more money than this version. They sold more than previous models because they played to the masses, who don't give a **** about removable batteries or IR blasters, etc. If you're only selling to the geeks that care about that you'll lose even more money. Check out the sales figures for the G4 and G5.
I hear what you saying about the G4 but G5 was garbage and not what LG users wanted, LG's attempt to he like Samsung was stupid, I owned a G2 I kept that phone through G3 and G4 intros. G2 was a badass phone. I would think projected sales is important too, if LG would have included ALL features in the phone for ALL regions it would have been a hit, I would have bought a G6 if they would have included the DAC for U.S. markets.
I disagree about the LG g5 being garbage I had the g4 and now the g5 and for me apart form the screen size the g5 is the better phone. I think what LG have missed out on this time is a few small things for me. I'm getting the xz premium in September as the g6 is missing a camera button miss this in the 5 to but that's because I was a Windows phone user. Only 32gb version in the UK xz is 64 GB that's the reason why I'm not getting the g6 and getting the premium instead.
So much for competition...