LG today announced that its third-quarter profit has plunged, as losses in its smartphone business widened.
The South Korean company earned $6.73 million in the July-September period, down 99 percent from a profit of $733 million a year earlier. Sales in the third quarter fell 2 percent to $11.2 billion.
LG has struggled in the mobile handset sector, where competition from the iPhone and hugely-popular Android-based smart phones from rivals such as HTC and Samsung dominate the market. As a result, phone sales for LG dropped 10 percent to 28.4 million in the third quarter from 31.6 million in the same period last year.
Losses also grew to a record $270 million and margins dropped to a negative 10 percent, reflecting a weak lineup of smart phones and growing development and marketing costs to boost faltering sales of low-priced models.
The flat financial results has increased the pressure. Koo Bon-Joon, a member of LG's founding family, took over as CEO earlier this month, charged with turning around its mobile phone business. Koo has replaced the heads of the struggling phone and TV divisions and begun investing heavily in the research and development of new products.
LG has much riding on its Optimus One model, running on the popular Android platform, and the Optimus 7 based on Microsoft's Windows system. The company unveiled both in October, hoping it will help LG gain traction in the smart phone market.
The low-end Optimus One device has sold 200,000 units since its launch three weeks ago. LG is angling to sell at least 10 million units of the handset.
But whether it is enough for the world's number three mobile phone maker to recover from record losses in the third quarter and turn itself around quickly in a highly competitive smart phone market remains to be seen.
LG has struggled in the mobile handset sector, where competition from the iPhone and hugely-popular Android-based smart phones from rivals such as HTC and Samsung dominate the market. As a result, phone sales for LG dropped 10 percent to 28.4 million in the third quarter from 31.6 million in the same period last year.
Losses also grew to a record $270 million and margins dropped to a negative 10 percent, reflecting a weak lineup of smart phones and growing development and marketing costs to boost faltering sales of low-priced models.
The flat financial results has increased the pressure. Koo Bon-Joon, a member of LG's founding family, took over as CEO earlier this month, charged with turning around its mobile phone business. Koo has replaced the heads of the struggling phone and TV divisions and begun investing heavily in the research and development of new products.
LG has much riding on its Optimus One model, running on the popular Android platform, and the Optimus 7 based on Microsoft's Windows system. The company unveiled both in October, hoping it will help LG gain traction in the smart phone market.
The low-end Optimus One device has sold 200,000 units since its launch three weeks ago. LG is angling to sell at least 10 million units of the handset.
But whether it is enough for the world's number three mobile phone maker to recover from record losses in the third quarter and turn itself around quickly in a highly competitive smart phone market remains to be seen.
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