LG's smartphones drag it back into loss, as Samsung claims it's pipped Apple on sales

The two major Korean consumer electronics companies have had mixed fortunes in the smartphone world over the past three months: LG is attributing a fall in operating profits – it showed its first loss in three quarters – to ongoing problems in its phone business, while Samsung is claiming its Galaxy smartphones overtook Apple's iPhone in July-September.

Having had two quarters of operating loss last year, LG showed a profit in the first two quarters of this year, but in the third quarter went back to an operating loss of W31.9bn (almost £18m) on sales of W12.9tn (£725m). That's not on the scale of last year's losses, when it lost W185.2bn (£104m) in Q3 and W245.7bn (£138m) in Q4, but it's still disappointing.

Those 2010 losses were attributed to an inability to respond to the boom in smartphones, and it seems that situation may have come back to haunt LG. Its entire phone division sold just 21.1m handsets in July-September, after it switched focus away from basic models to concentrate on smartphones.

Revenue was down 14.9% quarter on quarter at W2.76tn (£1.5bn), and the division made an operating loss of W138.8bn (£78m), almost W80bn (£45m) more than it lost in the previous quarter.

The company's Home Entertainment division, which includes TV and home cinema systems, did rather better, with sales down just 0.9% quarter on quarter at W5.37tn (just over £3bn), and an operating profit buoyed by sales of premium products of W1.01bn (£568m).

Galaxy ahead of iPhone?

Meanwhile the president of Samsung's mobile division has said that the company overtook Apple's iPhone in the smartphone market over the past three months.

Speaking at the launch of the Galaxy Nexus (above) in Hong Kong, Shin Jong-kyun told reporters that he estimated the company had shipped at least 20m smartphones in the third quarter, adding 'I think it's more'.

Market analysts suggest that the actual figure could be anything from 23m to 28m.

Apple says it sold 17.07m iPhones in the same period, and was the market leader in the previous quarter, followed by Samsung. market leadership.

However, recent months have seen rumours circulating about the iPhone 4S, which was finally launched on October 4th, and this is thought to have caused many potential iPhone buyers to hold off for the new model.

Apple is reporting record sales and pre-orders for the iPhone 4S.

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Andrew has written about audio and video products for the past 20+ years, and been a consumer journalist for more than 30 years, starting his career on camera magazines. Andrew has contributed to titles including What Hi-Fi?, GramophoneJazzwise and Hi-Fi CriticHi-Fi News & Record Review and Hi-Fi Choice. I’ve also written for a number of non-specialist and overseas magazines.