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[Engadget] LG's mobile business just lost $67.8 million

post #1 of 46
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LG's mobile business just lost $67.8 million

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Quote:
If you were under any doubt that companies will struggle to make a profit from the smartphone business, you won't after today. LG has updated its financial results to reveal that the firm's mobile division lost $67.8 million in the last three months. That's in sharp contrast to the previous quarter, where the company could boast of squeaking a 1.2 cent profit from every handset that it sold. LG believes that the recent launches of both the Nexus 5X and V10 smartphones will help to wash away some of that pain. If executives were looking for reassurance, they'll get it from Sony which also posted its updated financial results today. The rival mega-conglomerate conceded that its own mobile division is losing $1.9 million every single day -- ouch.

Ouch indeed.
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post #2 of 46
I was about to bring up Sony as a comparison to say LG isnt "that" bad, but I see the article did that for me. lol

The Android smartphone market is just too saturated. There are far too many companies releasing 5-6 new models each year and a ton of little guys adding in their 1-2 new handsets each year as well. This just leads to too high R&D cost, too high manufacturing cost, too much oversupply costs, and not enough people to bring profit to the multitude of companies.

I like LG, they made a nice comeback and their phones work well, but LG is just beyond horrible at coding their OS variant of Android and the spyware they add in for data mining is just sickening. I really hope that LG and Sony leave the smartphone market and that all the new startups we have seen the past 2 years also leave (Lenovo, Sharp, OnePlus, Pepsi, etc, etc). Bring it back to just a couple models from each company that are all quality.
Edited by EniGma1987 - 10/29/15 at 5:33am
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post #3 of 46
Loosing 1.9 million a day. That's a bold move, cotton. Lets see if it pays off.
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post #4 of 46
Quote:
Originally Posted by luckyduck View Post

Loosing 1.9 million a day. That's a bold move, cotton. Lets see if it pays off.

That is down from what it used to be, hence why Sony says their mobile division helped them finally turn a profit as a whole because mobile didnt suck *as much*. lol
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post #5 of 46
At some point the smartphone has to peak just like the PC, where you don't need to ugrade every 6 months, or year or even for several years...
post #6 of 46
The smartphone market is not lacking high end. Is lacking great mid range phones.
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post #7 of 46
This is what a saturated market looks like. Most of them are posting a loss on their smart phone divisions. Smartphones are coming to the same point as PCs did a couple years back. There is just no real reason to upgrade beyond bragging rights and the customary "me too" shout out. I'm rocking a Galaxy S2, and it's NOW starting to show its age. I might upgrade, then again, I might just back to dumb phones, so I don't have to charge the damn thing every day.
post #8 of 46
Idk how companies release "the best phone ever" last year then expect people to buy "the best phone ever" this year. Phones don't blow up inspector gadget style when the new model comes out. How can you expect to sustainably increase profits each year? This is before even taking into account competition.

Sometimes I truly feel like this is such a waste of time and resources that you be used for idk, making the world a better place?
post #9 of 46
Smartphones have definitely reached the saturation point. All modern smartphones have great cameras, video recorders, fast enough internet, access to GPS, maps, voice controls, calculators, alarm clocks, games, music..... What more do we really want?

My galaxy s4 is on it's death throes but if it still functioned like it did when I first got it, I wouldn't even think about replacing it.
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post #10 of 46
Quote:
Originally Posted by Exeed Orbit View Post

This is what a saturated market looks like. Most of them are posting a loss on their smart phone divisions. Smartphones are coming to the same point as PCs did a couple years back. There is just no real reason to upgrade beyond bragging rights and the customary "me too" shout out. I'm rocking a Galaxy S2, and it's NOW starting to show its age. I might upgrade, then again, I might just back to dumb phones, so I don't have to charge the damn thing every day.

That's right it is saturated, which makes it quite difficult for Android manufacturers.

OCN users tend to only think in terms of market share (iOS 14% and Android/others make up the rest at 86%)., which is made up of a lot of different manufacturers. However if you look at operating margins of each phone manufacturer, Apple and Samsung are the only ones with a positive margin.
Quote:
Apple reaps 92 percent of the total operating profit in the industry. Samsung came a distant second with 15 percent. The total is more than 100 because the remaining posted losses.

http://english.chosun.com/site/data/html_dir/2015/10/15/2015101501736.html
Quote:
Apple Inc. recorded 92% of the total operating income from the world’s eight top smartphone makers in the first quarter, up from 65% a year earlier, estimates Canaccord Genuity managing director Mike Walkley. Samsung Electronics Co. took 15%, Canaccord says

http://www.wsj.com/articles/apples-share-of-smartphone-industrys-profits-soars-to-92-1436727458

Very simply put Apple and Samsung are the only ones that make money off of each phone they sell. It's not surprising that LG, Sony, and everyone else are posting losses.
Edited by NYU87 - 10/29/15 at 2:05pm
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Overclock.net › Forums › Industry News › Technology and Science News › [Engadget] LG's mobile business just lost $67.8 million