After yet another poor quarter, LG Mobile puts all its faith in the Velvet 5G
Yes, it's that time of the year quarter again, and after taking a close look at Samsung's robust financials and not-so-rosy predictions for Q2 2020 and beyond, we'd like to quickly discuss LG's performance during the year's first three months as well.
Just like its domestic arch-rival, this tech giant is also involved in many different businesses and industry segments, some of which are significantly more successful than others. But while Samsung can rely on its well-oiled smartphone division for a considerable chunk of its overall profit even at the beginning of a pandemic, the LG "Mobile Communications Company" continues to be the main money waster under the coordination of LG Electronics.
Although Q1 2020 was by no means LG Mobile's worst ever quarter, the division still managed to lose more than $200 million (KRW 237.8 billion). LG Electronics can find a little comfort in seeing the operating loss of its smartphones shrink from the previous quarter, but on the not so bright side of things, that deficit is larger than the one posted back in Q1 2019 (KRW 203.5 billion, or $181 million).
Things are even worse when considering the company's sales, which took a pretty massive hit from KRW 1.51 trillion and 1.32 trillion in Q1 and Q4 2019 respectively to less than one trillion Korean won, roughly equating to $840 million. While LG has a perfectly reasonable explanation for that, pointing the finger at "Chinese partners" for "supply disruptions" caused by coronavirus-related factory shutdowns, it's certainly not a good sign that the company doesn't say anything about the V60 ThinQ in its latest financial report.
Granted, the no-nonsense flagship went on sale towards the end of the January - March timeframe, but instead of declaring its optimism for V60 demand looking ahead, LG expects the as-yet-unreleased Velvet 5G to "mark a new direction with a different design philosophy, competitive yet value-conscious components and enhanced online sales initiatives."
By the way, if you're excited about the impending arrival of that 5G value flagship, you might want to keep your expectations in check, as LG appears to suggest the handset will be released exclusively in Korea. That would be a terrible mistake after the company garnered so much interest around the world, but maybe we're jumping to conclusions here.
All in all, LG had another tremendous quarter, exceeding 1 trillion won in profit for only the second time in history thanks primarily to home appliances and "air solutions." In other words, the Velvet 5G will be brought to you by LG's incredibly profitable washers, dryers, and dishwashers.
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