LG suffered dizzying losses in 2020, sales were up slightly

Some manufacturers, such as Xiaomi, have been doing good business in recent years. Other parties are doing ‘slightly’ less well and often suffer heavy losses. The latter was again the case for LG in 2020: despite the fact that the sales numbers have increased, a considerable loss was recorded.

Good luck LG Velvet

After years of red numbers, the South Korean LG managed to find a bright spot again with the Velvet. In a sea of ​​midrange phones, the Velvet managed to hold its own with excellent performance, and that for a reasonable price. However, one telephone line that runs well is not enough to conjure up green turnover figures. Although sales were up, LG also had to see an increase in loss.

The fourth quarter of 2020 delivered a five percent year-over-year (YoY) increase: during the fourth quarter of 2020, it sold five percent more phones than in the same quarter a year ago. At the same time, it’s a drop in sales compared to the third quarter, when it shipped nine percent more phones. LG says this is due to a shortage of 4G chips and a drop in sales of high-end phones.

Again loss-making

In terms of earnings, LG’s mobile division shows a decline of 18 percent in the fourth quarter from the third quarter. On an annual basis, LG sees its profit figures decline by 16 percent. Bottom line, LG lost about $ 751 million: the loss is slightly lower than in 2019, when LG still had to write about $ 860 million for its mobile division. With the permanent loss, uncertainty about LG’s future in the smartphone market seems to be increasing all the time.

In the quarterly report, LG concludes that it “is considering its current and future competitive position objectively and is taking a closer look at the course”. Looking ahead to the future, LG states that it “expects sales to rise to pre-corona-era levels.” LG also says that competition will continue to increase. Whether LG’s mobile division is up against it in its current form remains unknown. After previously saying not to sell the mobile division, the Korean company recently got back to that.

Future LG phones

So what the future of LG will look like is still uncertain. It is clear that LG needs a new strategy to become profitable. Last year, LG tried to achieve this independently with its brand new Velvet and Wing: two phones that received a lot of attention.

In retrospect, that turns out not to be enough to make LG Mobile Communications profitable. Do you think LG will sell its mobile division? Let us know in the comments at the bottom of the article.