The South Korean company cut television prices sharply in the face of falling demand and rising competition. That overshadowed record smartphone sales as LG tries to make up lost ground in the mobile phone market by focusing on emerging markets.
LG said net profit sank 91 per cent to Won22.1 billion ($19.8m) in the first quarter from a year earlier, while overall sales rose 6.8 per cent to Won14.1 trillion. LG already has overtaken Taiwan’s HTC as the world’s third-largest smartphone maker by sales, but still has a long way to go to catch up with bigger rivals such as Samsung Electronics and Apple.
LG’s TV margins fell to 0.6 per cent in the first quarter from 3 per cent a year earlier, while profit from the TV business dropped 82 per cent to Won29.8bn.
Although LG started selling the next-generation OLED (Organic Light-Emitting Diode) TVs in the first quarter sales of the premium TVs have yet to contribute to its bottom line. LG plans to increase TV shipments by 15 per cent this year by focusing on higher-end TVs such as interconnected smart TVs and 3D TVs.