Posting 19 Consecutive Quarterly Loss
LG Electronics' operating losses in the smartphone business topped one trillion won in 2019. The company's smartphone business division suffered losses for 19 quarters in a row. The company's dual-screen smartphone gained popularity in Korea and it tried to cut costs by relocating production facilities to Vietnam, but it suffered a setback due to a slowdown in overall smartphone sales.
LG Electronics announced on Jan. 30 that the MC Business Division in charge of the company’s smartphone business posted 1.32 trillion in sales and 332.2 billion in operating loss in the fourth quarter of 2019. Its operating loss more doubled from 161.2 billion won in the previous quarter.
In particular, its annual cumulative deficit also expanded. The MC Division recorded operating losses of 1.009.9 billion won in 2019. Its annual deficit swelled by more than 200 billion won from 789 billion won in 2018.
“Our sales dropped due to a decrease in sales of our budget smartphones in the North American and other overseas markets,” LG Electronics said. “We sustained operation loss due to weak sales, a spike in marketing costs, and an adjustment of year-end distribution inventories.”
LG Electronics gained in popularity in Korea last year with its dual-screen phones, the V50 and V50S ThinQ, but did not succeed in expanding its global market share in the mid- to low-prices models.