LG’s Profits Down 99%

Amidst all the great Android and Handset news coming out of Korea via Samsung Electronics and Samsunc Telecommunications, the parent company to Samsung Mobile USA, there is some bad news coming out of Korea as well. That news is that Samsung’s only real competition in the wireless space coming out of Korea, LG, saw profits dip 99% to an all time low.

LG’s Mobile division posted a record operating loss of $270 million, more than double the $101 million operating loss reported in the 2nd quarter. Sales dropped over 30% over same quarter last year. LG Shipped 28.4 million units which is down 10% from same quarter last year and down 7% from the second quarter.

The company blamed weaker sales, lower average selling prices and investments in research and development for the loss. Earlier this year it was announced that the LG Optimus line would be a staunch competitor to rival Samsung Mobile and the Samsung Galaxy S. However when the devices were released they were all at sub $75 pricepoints, and faced with the fact that at release the hardware was only mediocre. Despite their low pricing LG CFO said “We expect the sales prices for handsets to improve from the fourth quarter of this year, helped by our Optimus One smartphone rollouts,” Jung went on to say to the Dow Jones Newswires that he expected sales of 3million globally on the Optimus One line by the end of the year. He as optimistic that the handset division will begin to see a recovery by the first quarter.

LG seemed to have a much better footing on the “dumb phone” and “feature phone” sector. It appears that they put too much faith and not enough effort into their smartphone lineup.¬† Before the end of the year we are expected to see one more Android handset release as well as a Windows Phone 7 release.¬† LG also said they will continue to target mid tier customers with touchscreen and qwerty handsets.

LG CEO Nam Yong resigned last month amidst declining phone sales.

source: Fierce