LG and Sony have submitted their quarterly reports for the second or first financial quarter of 2019. Both companies are still struggling in the area of smartphones, although changes in corporate structures should have actually brought about a turnaround. LG sees the blame for the competitive LTE smartphones.
In the second financial quarter of 2019 LG has only been able to sell 1.61 million smartphones. This corresponds to a decrease of 21.5 percent compared to the same period of the previous year. LG justified the decline with low demand for premium smartphones with LTE support. Apparently, the innovations presented to the MWC G8s (test) and not available in this country G8 sell well.
Strong 5G competition expected
A glimmer of hope on the horizon recognizes LG, however, in the new 5G smartphones. The 5G LG V50, which LG offers in its home country of South Korea and the US, has led to a 7% increase in sales, at least compared to last quarter. However, with the broad availability of 5G smartphones over the coming months, it will be necessary to show whether customers will even resort to LG even with a larger selection of providers. In South Korea and the US, the LG V50 and the Samsung Galaxy S10 5G are currently offered for 5G tariffs.
In the outlook for the third quarter of 2019, LG is already addressing this situation and expects stronger competition in 5G smartphones, especially in North America and South Korea. LG wants to reduce production costs by running costs. Previously, LG had restructured the company so that the former head of the TV division leads the smartphone business and should promote this out of the crisis, which has failed, at least to date.
LG's smartphone division is shrinking by 19 percent
The Mobile Communication business unit generated sales of SEK 1.6133 trillion in the second quarter of 2019, equivalent to EUR 1.225 billion, down 19.4 percent from a year ago.
Sony veils stumbling smartphone business
At Sony, the smartphone business has not been a separate division since the end of the fourth quarter of 2018, but has been integrated into the Electronics Products & Solutions (EP & S) division in the current report of the first quarter of 2019. As a result, sales are no longer spent on smartphones. The business with smartphones had slumped for Sony recently dramatically. By 2020, the workforce is to be reduced by 50 percent. The last official figures come from the announcement three months ago, when only 1.1 million units sold were bottom line. At the best time in 2014 there were almost 12 million devices in the quarter.
From Sony's quarterly report can be derived, however, even without sales figures on the basis of the turnover achieved that it is poorly ordered in the EP & S to the smartphones. Because for the subsection Mobile Communications of Sony continues to spend a turnover. This was in the first quarter of 2019 at 100.55 billion yen, which corresponds to 830.744 million euros. This in turn represents a decline of 22.86 percent compared to the same period last year.
2019 remains difficult for Sony
Sony assumes that the situation in the financial year 2019 will not improve. On the contrary: Sony expects further declines in smartphone sales.