LG Chops Sales Targets Due To Struggling In Smartphone Space
Apparently the outlook for LG in the smartphone space is looking somewhat grim; the world’s 3rd largest handset maker by volume has struggled to crack out into the highly competitive smartphone market and has therefore been forced to chop their sales targets.
According to an article over on Reuters, the South Korean phone maker has stated that at this time they are unable to forecast a turnaround time for their phone unit, a unit that has reported 4 consecutive quarterly losses.
LG has been somewhat lagging behind in the smartphone game with homeland rival Samsung beating LG in the smartphone space because LG has been slow in focusing on smartphones while its smaller scale has prevented it from profiting from the rise in demand for cheaper handsets.
The head of handset division for LG, Park Jong-seok has said, “Our overall performance is gradually improving … but it’s difficult to give a precise prediction when our business will turn around due to a fast changing external market environment.”
According to two industry sources, Nokia who like LG was slow to revamp to smartphones has apparently cut prices of their smartphone offerings across Europe by as much as 15%.
The research director of CCS Insight, Ben Wood remarked, “LG’s weakness in smartphones is having a knock-on effect across the portfolio and severely straining margins. Nokia’s recent price drops reflect the cut-throat economics all phone makers face.”
According to Park, in the first half LG shifted nearly 50 million mobile phones, which included just over 10 million smartphones, while rival Samsung is estimated to have sold about 19 million smartphones in Q2 alone.
Apparently LG has now chopped their previous 2011 smartphone sales forecast of 30 million down by 6 million to 24 million units and have also cut their overall handsets sales target from 150 million down to 114 million.
Word is LG is expected to report their 5th consecutive quarterly loss in the period from April to June in handset sales due to failing to push out devices that can challenge the likes of rivals Samsung and Apple and the iPhone along with weakening demand growth for their simpler devices.
However, helped by the solid demand for such LG devices as the LG Optimus Black and LG Optimus 2x, they are gradually narrowing the losses and overall performance is recovering. Analysts predict LG will report later this month Q2 losses from handset sales narrowed to 70 to 90 million won, from 120 million won the year previous.