LG Electronics had a poor second quarter performance that subsequently gave it low profit returns courtesy of its poor sales in TV and Handsets. In what could only be termed as a failure to compete favorably in the market place, LG’s smart phones such as the LG Ally were outperformed by tougher competitors such as Google’s Android smart phones.
In the face of competition from smart phones such as the Samsung Galaxy S, Motorola Droid X, the HTC EVO 4G amongst others, LG’s smart phones just could not fly. As a result, the company did experience a downfall in profits thanks to its lame smart phone. The company had a stressful second quarter with profits that peaked at a low of $106.6 million that marked a fall of around 33% when compared to last year’s second quarter. Smart phones are all the rage right now and companies that can’t match the competition it seems will have to up their game, thanks to LG’s experience.
If smart phones are the in thing currently, its smart phone might have been its largest mistake despite the fact that the company is the third biggest phone manufacture globally, coming third after Nokia and Samsung. This fact is corroborated by LG’s handsets shipments in the second quarter for which it made this huge losses. It is estimated that the company shipped about 30.6 million phones in the second quarter but despite that fact, its greatest undoing perhaps is its conspicuous absence from the smart phones market, the high end category of phones for which its rivals such as Samsung, Apple Inc and HTC are kings with super phones. As such, a comparison of the LG Ally smart phone and the other super phones in the market currently will give you one result, it cannot compete!!! LG’s rival smart phones are giving a raw deal as they out do it by far, and that is LG’s biggest mistake.
Back to Drawing Board
However, it appears LG is learning its lessons, albeit painfully and plans to launch its own Android based smart phones by end of 2010. The company is expected to launch about 20 of this as a preliminary market trial and all eyes are ken on what it can achieve. At the moment there can only be speculation as hopes are pegged on LG’s LG Optimus that is expected to launch with a bang, whereas the other gadgets are expected to be perhaps mid-range phones like the Ally. To confirm that it has got its lessons right, LG said it will be a hardware partner for the Microsoft Windows 7 phone. This perhaps might work to the company’s advantage as it spreads its wings out rather than focus entirely on the Android rush.
What will play into LG’s hands is the fact that carries such AT&T are preparing to market Windows Phone 7 in its millions to its users and as a result, LG might just see its own windows 7 phones sales increase in the future.