LG ships 10.3 million smartphones in Q1 2013. Smart product strategy starts generating impressive results
LG’s mobile phone/smartphone recovery is picking up the pace. Today LG reported Q1 2013 results, and the numbers their mobile phone division delivered, look pretty impressive.
In January-March LG shipped 10.3 million smartphones. That’s 110% increase compared to the first quarter a year ago. And 20% increase over Q4 2012, which is even more impressive since we are comparing Holiday Season quarter to Q1, where we usually expect seasonal sales decline. In addition to revenue and unit growth, LG more than doubled its phone unit profitability, increasing the operating margin from 2% to 4.1% and profits from $50 million to $119 million in three months. And they did it through robust sales of both its flagship Optimus G and mid to low-end L-Series devices.
LG’s guidance for Q2 is also optimistic, and they expect increased sales thanks to the worldwide roll-out of their new LG Optimus G Pro phablet, and the updated L Series II handsets.
Even though LG is starting from a pretty low base, and absolute numbers look trivial to compared to their main Korean rival – Samsung, you have to start somewhere. And, for LG the mobile device unit, results are great. They show that LG has finally figured out what it takes to compete in the world of Android and iPhone, and has already become a serious player there.
LG also has a pretty smart product launch and marketing schedule: waiting for Samsung to launch their flagship, giving it ~6 months and coming out with a rival, improved device when excitement about current Samsung Galaxy starts petering out. It worked perfectly for LG Optimus G and Nexus 4 vs Galaxy S III, and should work just as well now, when Optimus G Pro is ready to challenge Galaxy Note II. And for the end of the year, after Galaxy S4 had its summer run, LG will have that “different and unique” Optimus G2 to boost its Christmas sales.
If LG doesn’t screw up the execution, life may indeed soon become real good for them in mobile.