LG Electronics Smartphones, 20 Consecutive Quarters of Losses

Next Month's 'LG Velvet' Launch, Strengthening Affordable 5G Lineup

[Asia Economy Reporter Han Jinju] LG Electronics' MC Business Division, which is in charge of the smartphone business, has recorded losses for 20 consecutive quarters.

On the 29th, LG Electronics announced that the MC Business Division posted sales of 998.6 billion KRW and an operating loss of 237.8 billion KRW in the first quarter. Sales decreased by 33.9% compared to the same period last year, and the operating loss increased further.

Disruptions occurred in supply from Chinese ODM (Original Design Manufacturer) partners due to the COVID-19 pandemic, and the closure of some retail stores in Europe and Latin America led to a sharp decline in sales. Although labor costs decreased due to production site optimization and marketing resource expenditures were reduced to cut costs, operating losses continued due to the decline in smartphone sales.

The smartphone market is expected to see intensified competition among manufacturers as demand has significantly decreased due to the spread of COVID-19. LG Electronics plans to launch the mass premium smartphone ‘LG Velvet’ in mid-next month and strengthen its budget lineup in line with the expansion of the 5G market. LG Electronics stated, "We will strengthen online sales to expand sales opportunities and continue to pursue cost efficiency based on platformization and modularization strategies."

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