LG Smartphones Record 19 Consecutive Quarters of Losses... Last Year's Cumulative Losses Reach 1 Trillion Won

Q4 Revenue 1.3208 Trillion KRW, Operating Loss 332.2 Billion KRW
2019 Operating Loss 1 Trillion KRW... 200 Billion KRW Increase YoY
Q4 Revenue Hit Hard by Decline in North American Budget Phone Sales

[Asia Economy Reporter Han Jinju] LG Electronics' MC Business Division, responsible for the smartphone business, has recorded losses for 19 consecutive quarters. This is due to a decline in sales of budget smartphones in the North American market and increased marketing expenses.

On the 30th, LG Electronics announced that the MC Business Division's sales in the 4th quarter amounted to 1.3208 trillion KRW, with an operating loss of 332.2 billion KRW. Compared to the same period last year, sales decreased by 21.2%, and operating losses increased by 6.2%.

The total cumulative sales of the MC Business Division in 2019 were 5.96 trillion KRW, down by about 2 trillion KRW compared to the previous year. Operating losses totaled 1.01 trillion KRW, increasing by about 200 billion KRW from 789 billion KRW the previous year.

Fourth-quarter sales declined compared to the same period last year due to decreased sales of budget smartphones in overseas markets such as North America. Operating losses continued due to decreased smartphone sales, increased marketing expenses, and year-end inventory adjustments. Securities firms estimate LG Electronics' smartphone shipments in 2019 to be around 29 million units, a 28% decrease from the previous year.

LG Electronics plans to contribute to performance improvement this year by launching 5G smartphones ranging from premium to budget models. For budget 5G smartphones, the company aims to expand sales by equipping core specifications while achieving cost competitiveness through ODM. Since last year, LG Electronics has been relocating its production base to Vietnam to focus on cost reduction.

LG Electronics stated, "In line with the expansion of the 5G market, we plan to timely launch various 5G models from premium to budget according to each country's situation to achieve meaningful results in the 5G market. We will pursue sales growth with differentiated products that meet customer expectations and continuously work on improving profitability by strengthening cost competitiveness."

This content was produced with the assistance of AI translation services.