LG smartphone sales soar, boosted by G3
Strong demand for its flagship G3 boosted LG Electronics’ overall smartphone shipments to a record 16.8 million in the third quarter.
The results appear to be sharply in contrast with that of rival South Korean company Samsung Electronics, which in its earnings guidance earlier this month warned that its third quarter operating profit could fall by almost 60 percent because of sluggish sales of mobile devices.
LG reported Wednesday that operating profit in its mobile communications business soared in the third quarter, boosted by sales of its premium LTE smartphones. Shipments were up 39 percent year-on-year, boosted both by the G3 and the cheaper L series phones such as L Bello and L Fino.
The company’s Chinese rivals have not had an impact yet on the LTE market, according to analysts.
“The G3’s market response has been good, … and demand for LTE smartphones increased rapidly,” said Yoon Bu-hyun, LG’s head of mobile division, during an earnings conference in Seoul. “We expect [the] smartphone market to grow continuously with seasonality [in the fourth quarter], especially for the LTE market.”
The company is preparing for the roll out of G Flex, the curved-screen smartphone, Yoon added without giving a specific timeline.
“G3 has proven its market success in terms of product competitiveness even in head-to-head with Samsung’s Galaxy S5, and it helps boost the expectation for its next flagships including the G4,” said Cho Jin-ho, analyst at Mirae Asset Securities in Seoul by phone.
LG probably sold about 4 million G3 devices in the quarter and Samsung’s Galaxy S5 sold “not quite” of 5 million in the period, which is much less compared to the previous performance of Galaxy S3 and S4, according to Cho.
Global demand for LTE smartphones is expected to reach 63 billion next year from 43 billion this year, with demand especially in emerging markets, Cho wrote in a research note.
LG’s operating profit in its mobile communications business climbed to 167.4 billion won (US$159 million) on sales of 4.3 trillion won in the July-to-September period, the highest since the third quarter of 2009. The company’s net profit was 203 billion won and revenue was 14.92 trillion won in the quarter.
