Until Now LG’s G5 Has Only Contributed To Growing Mobile Losses

Good news and bad news out of South Korea’s two electronics giants currently. Samsung, buoyed by its new Galaxy S7, is reporting improved profits for the past quarter, while LG’s mobile division sunk deeper into the red with a $168 million loss. The primary cause for LG’s increased expenses was marketing around the launch of the modular G5 smartphone, LG’s new flagship, even if the company’s other products didn’t fare too brilliantly either. LG mobile sales at the beginning of this year fell by 15.5 percent in monetary terms, with 13.5 million smartphones representing a 12 percent decline in shipments.

LG Electronics Inc., in a word, returned a $420 million operating profit due to its reliable home appliances business. Nevertheless, the mobile devices group continues to struggle to establish itself, even with all the vast resources, investment, and engineering expertise of the greater company. Yesterday IDC reported the latest shifts in the top-five smartphone vendors, and LG was nowhere to be seen in that discussion.

Until Now LG's G5 Has Only Contributed To Growing Mobile Losses

Read more: LG G5 review

The G5, LG’s first flagship smartphone of two coming this year, strives to distinguish itself through a system of modular accessories. Of course, it garnered plenty of interest during its debut at Mobile World Congress, however it only just started hitting retail shelves at the end of the financial quarter, thus its impact on LG’s actual sales has yet to be felt in full. Until now, the Korean company has spent the money to make sure that the G5 is well known — the question in another three months’ time will be how well that investment pays off.

Mobile World Congress