LG Takes A Hit In Its Quarterly Earnings Report

After witnessing underwhelming sales for the unique flagship LG G5, the company went back to a safe design and an early launch to get things back on track. Unfortunately for LG, their quarterly earnings still indicate an operating loss of $117 million for the second quarter of 2017.

What Went Wrong?

Officially, LG is blaming lower than expected sale numbers and increased material costs for the loss but there may be other factors at play here as well.

One reason appears to be a loss in customer trust after quality issues appeared in 2015’s flagships, the LG G4 and LG V10. For those unfamiliar, users started experiencing a ‘Bootloop’ issue in the G4 and V10 after a few months of use. After a lot of pressure from social media and technology media outlets, LG finally gave an official statement , attributing the issue to a ‘loose connection’ in the smart phone.

It didn’t end there though. The company’s next flagship, the LG G5, had design issues. Due to its modular design many users noticed gaps and an uneven back casing (specially around the modular opening). Moreover, users also complained about ‘light bleed’ and GPS problems, though the latter two were a rare occurence.

The cherry on the top was the same bootlooping issue now plaguing the LG manufactured Nexus 5X and Huawei’s 6P (thanks to the Snapdragon 808/810).

This series of phone breaking problems and poor response from LG on the matter have might damaged its loyal fan base resulting in the poor numbers.

Another factor attributing to this seems to be the choice of an early release this year. In an attempt to get a jump on Samsung, LG released its flagship G6 earlier than usual this time around which came at the cost of using older Snapdragon 821 chipset.

The attempt seemed to have worked initially as indicated by the Q1 2017 results. The mobile division almost broke free with a loss of $180K (as opposed to the millions of dollars lost previously). But apparently this was only short lived and with the release of the Galaxy S8 the sales have once again plummeted leading to the current numbers observed.

Future Prospects

LG is optimistic about future profit estimates and is relying on the new premium Q series and the soon to be released LG V30 to boost its profits in the coming months.

The V30 will definitely be a powerhouse boasting the latest and greatest specs but rumours are suggesting it will be missing its two unique features – the secondary display and the removable battery – in favour of IP68 water and dust resistance.

What do you think about the LG G6 and LG as a whole? Have a discussion in the comment section below.