LG's struggle in the smartphone business is no secret to anyone. The company has had solid offerings in the smartphone market in the past, being one of the pioneers in the flagship Android segment with successful devices like the LG G2. The brand was also the home of innovative ideas.
For example, it introduced one of the first QHD smartphones in the form of the LG G3. It also introduced one of the few modular smartphones in the form of the LG G5. Also, LG started the 18:9 display trend back in the days of the LG G6. Despite this, the company has been accumulating losses in recent years.
Despite efforts with the arrival of LG Velvet and LG Wing, the company could not achieve a successful 2020. The Korean giant shared its financial results for 2020, showing once again that its smartphone business is burning through cash.
January was filled with many rumors about LG's future in the smartphone business. Despite the fact that the brand showcased the LG Rollable smartphone at CES 2021, it looks like the brand is really killing its smartphone business. The Korean tech firm has released its Q4 2020 financial report, and the numbers show that the mobile division narrowed its loss to KRW 841,20 billion ($750,63) for the 2020 calendar year. Given these results, it seems that even the LG Rollable can't save the smartphone business.
LG Mobile posted a loss for the 23rd quarter in a row
Operating losses for October-December are KRW 248,5 billion, which is about $222,93 million. This marks LG Mobile's 23rd consecutive quarter of a loss. The report notes that stagnant sales of LG's premium devices and a shortage of 4G chipsets are the main issues. Unlike other companies, the Korean firm has not been able to build a solid 5G strategy with affordable smartphones. Even the Velvet is ridiculously overpriced compared to other 5G phones from Chinese brands. The company also launched a controversial variant with the Snapdragon 845, which puts a big question mark in our minds.
Why is the phone coming in 2020 with a chipset from 2018? The company's smartphone sales brought in 1,39 trillion. Krona (1,24 billion dollars). This is 9,2% lower than in the third quarter, but at the same time it is almost 5% higher than the same period last year. Again, that's not enough to classify 2020 as a winning year for LG.
Despite the bloody business with smartphones, the Korean firm did not give up. At least not officially now. The company believes the push for 5G will boost demand for its smartphones as consumer demand is expected to return to pandemic levels in 2021. According to the report, LG will "carefully review the direction of its mobile business" and "share the direction of its business when it is determined."
