LG G5 Did No Wonders For Q3 Earnings, LG V20 To The Rescue

The LG G5 rode on the hype train driven by the dream of a modular smartphone. But, just as with Google's Project Ara, the company realized only too late that the train would lose steam too quickly. Unlike Google, however, LG already put much of its eggs in that basket, thinking that having the first commercially available modular smartphone would suffice. But alas, LG's financial earnings for Q3 2016 proved otherwise, with disappointing sales of the LG G5 causing a drop in its mobile business revenues.

The idea of a modular smartphone by itself is laudable and ideal. Being able to upgrade or repair a device piece by piece is not only convenient, it is also economical and, in the long run, environment friendly. But even Project Ara was unable to make that dream come true, and neither the LG G5's nor the Moto X's implementations came even close to that. Both latter smartphones only offered modular extras, not modular components.

Not that the G5 was a dismal smartphone. By all accounts and purposes, it is pretty much a premium 2016 smartphone. But it banked on that modularity for its success, a concept that may have been a bit too ahead of its time. Ignore that special sauce and the LG G5 would have a harder time standing out from the crowd. And the numbers proved that to be true.

LG reported a revenue of only 2.5 trillion KRW ($ 2.3 billion) for its Mobile Communications company for the third quarter. While it might not look like it, that's actually a 23% drop from revenues in the same period last year. It also suffered an operating loss of 436.4 billion KRW ($389.4 million) this quarter. LG has no qualms that lower than hoped sales of its premium smartphones was a critical factor.

So it isn't surprising that LG is pushing hard to recoup its losses with the V20, a less eccentric version of the G5 with a clearer purpose, and one that better relates to what consumers already do. The LG V20's focus is on capturing images, videos, and audio, which, in a world that's getting even smaller thanks to live streaming and social media, is exactly what most consumers want to do.

SOURCE: LG