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LG gets loss in 2010

26 January 2011 11:09 (UTC +04:00)

Baku - APA-Economics. LG Electronics today posted its first loss in seven quarters, as its struggling handset division contributed to a net company loss of KRW256.4 billion (US229.3 million) despite a slight upturn in sales, Mobile Business Briefing reported.

The fourth-quarter loss sharply reversed a net profit of KRW361.9 billion a year earlier. Sales from LG’s handset division, which accounts for around 20 percent of the company’s total revenue, fell 15 percent year-on-year to KRW3.328 trillion from KRW3.924 trillion. The unit’s operating loss margin slightly narrowed to 7.9 percent versus 10.2 percent in the third quarter. The company sold 30.6 million handsets, up 8 percent from 28.4 million units in the third quarter but down 10 percent year-on-year. LG is the marketâ€™s third-largest handset vendor in terms of unit shipments.

LG is seeking to overcome a major misstep in its handset operations, where it has fallen well behind global rivals such as Samsung Electronics and Apple in offering feature-packed high-margin smartphones. In recent months it has ploughed resources into developing smartphones and is set to release a new series of models as it seeks to return the key handset segment to profit. In its 2011 market outlook the vendor said it expects total handset sales across the industry to increase 8 percent year-on-year to 1.4 billion units â€œwith the continuous expansion of smartphonesâ€ and plans to make the most of that growth by focusing on profitability and launching â€œpremium smartphones and differentiated tablet PC productsâ€ while â€œrecovering cost competitiveness for feature phones.â€ It expects its own unit shipments to be â€œsimilar to 2010 but with improved product mix and [a] higher smartphone portion.â€ New products will include the Optimus2X / OptimusBlack, Revolution, and at least one tablet PC. The vendor has recently undergone a management restructure and Koo Bon-joon, a member of the founding family of the broader LG conglomerate, took over the leadership of the flagship electronics maker on October 1 after the resignation of Nam Yong in September due to the company’s mobile woes.