It has been reported that LG Electronics' smartphone G8 shipments are below market expectations. G8 is the first of the G-Series that is subject to the discouraging outlook of total shipments being less than 1 million units.
According to the suppliers of parts for LG Electronics smartphones to the 11th, the initial supply of parts for G8, which was officially launched last month, is estimated to be at the level of 300,000 units. 200,000 units of additional orders are planned for this month and 100,000 units are for the next month.
A partner company official said, "Based on past cases, we expect the G8's total shipments not to exceed 1 million units. G8 is the first in the G series not to exceed 1 million units shipped. " LG Electronics' major dealers have been trying hard to secure additional sales after learning this situation.
Some consider this sluggish smartphone business of LG Electronic as "positive". In the past, excessive marketing and shipment-oriented production strategies had negative effects on the company’s profits. In the case of G7, the company set the initial shipment target at 3 million units and received the parts in line with that goal. However, actual shipments only amounted to half of the goal. Thus, the company released derivative models to handle parts inventories, which resulted in a vicious cycle of eroding sales of subsequent models.
Kwon Bong-Seok, head of LG's MC business, said in a press conference in February, "We won’t create derivative models based on the same model." An industry official said, "I know that CEO Kwon Bong-Seok is focusing on internal efficiency first while simultaneously serving as the head of MC business. Adjustments will be made in various ways."
According to securities companies, LG's mobile communications (MC) division, which oversees the smartphone business, is estimated to have lost 200 billion won in operating loss in the first quarter. This means that the loss has been broadened from the first quarter of last year (136 billion won in deficit). The company has been in the red for 16 quarters consecutively.