News and photo source: THE WALL STREET JOURNAL
SEOUL— LG Electronics Inc. said Wednesday its third-quarter net profit nearly doubled from a year earlier after it sold a record number of smartphones.
The South Korean electronics company continued to eat into its bigger rival Samsung Electronics Co. ’s market share for mobile devices, particularly at home. But globally, LG is struggling against Apple Inc. and faces a newer challenge from fast-rising Chinese handset makers.
LG said its net profit for the three months ended Sept. 30 rose 87% to 203 billion won ($194 million) from 108.5 billion won a year earlier.
The company sold 16.8 million smartphones during the quarter, up 39% from 12 million sold a year earlier and a record for the company. Operating profit doubled to 461 billion won, with the mobile division accounting for more than a third of profits, the company said.
Following its second consecutive quarter of profit in the mobile division, LG said it will stick to a two-track smartphone strategy spearheaded by the company’s premium G series and cheaper L series models.
Local analysts estimate LG’s global market share came close to 5% in the latest quarter, a tad higher from last year’s levels. But a continued tug of war is expected against upstart Chinese brands such as Xiaomi Inc., which is estimated by analysts to have sold a similar number of smartphones as LG during the same period.
LG is better positioned in South Korea, where it grabbed a 27% handset market share in the third quarter, its highest in years, and up from just 18% a year earlier, according to Counterpoint Research. During the same period, Samsung’s share slipped to 60% from 66%, according to the same estimates.
LG executives hope the progress it is making at home will translate into overseas sales.
“Before, they [overseas partners] didn’t even spare us a glance. But now, most carriers take our products without any doubt,” said Chris Yie, a vice president for marketing at LG’s mobile division, said in a recent interview.
The number of global carriers that placed orders for LG’s latest G3 smartphone at launch was roughly 170, up by 30% from the previous model, Mr. Yie said. The big four U.S. telecom companies—Verizon Communications Inc., AT&T Inc., T-Mobile US Inc. and Sprint Corp.—all sell the G3. Analysts estimate Samsung to have had roughly 200 carrier partners for the launch of its latest top-of-the-line model, the Galaxy S5.