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July 25, 2012 six: 29 evening

LG struggles in mobile phone market

Simply by Simon Mundy in Seoul

A struggle to keep up with rivals inside the smartphone industry cost LG Electronics in the second one fourth, when the Southern region Korean developing group stated it revenue fell with a tenth, dragging is talk about price straight down. Two years ago LG vowed to overtake Samsung to become the world's second-biggest cellphone maker. In contrast having its local competitor, LG has struggled to keep up with the pace of innovation in that marketplace.

Revenue droped by an annual 28. six per cent in LG's portable communications division, which registered an working loss of $49. 5m – its sixth loss before seven quarters. Cost cuts helped the group to report a net income of $138m, up 46 per cent from the same period of 2011 – but it was still below analysts got forecast. The struggles inside the mobile provide were the key factor in back of an 14 per cent decline in group revenue, to $11. 2bn. LG is usually pinning it is hopes for the mobile procedure partly on the leading presence in telephones using the next-generation LTE high speed system. � Sales in the group's home entertainment arm, their largest department, fell six per cent to $4. 8bn. But improved margins for the reason that business, along with increased demand for 3D televisions, meant functioning profit much more than doubled to $188m. The business predicted that strong demand from growing markets would cancel out the falling revenue in the first half to deliver revenue expansion for the full year. This gave a far more cautious perspective for the mobile phone department, however. Last November LG revealed strategies for a legal rights issue of $950m to finance investment in the division – a plan that was welcomed with disapproval from buyers, who sent the company's stock down 14 per cent following the announcement.

The group reported subsequent investment in advertising as a significant reason for the mobile division's return to lossmaking territory in the second quarter – but it declined to forecast an excellent return to earnings in the second...



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