LG posts massive $224 million loss in Q4 2016 on poor sales of the modular LG G5

While Korean giant Samsung posted a record fourth quarter despite the Galaxy Note 7 fiasco, rival LG posted massive losses on poor sales of the G5.

LG’s overall profit for the year was a mere $109.31 million; a result of the $223.98 million loss that its mobile division posted for Q4 2016. LG’s home appliances, air solutions and home entertainment divisions posted huge profits.

LG reports that revenues did go up 15.4 percent in Q4 2016 on the strength of the LG V20. However, losses from the sales of the LG G5 were so bad that it put the division’s earnings in the red.

The LG G5 was announced at MWC 2016 last year and was among the very first modular smartphones to hit the market. LG kitted the phone up with some promising hardware, notably a Snapdragon 820 SoC, 4GB of RAM, a 5.3-inch 2K display and dual-cameras.

In our testing of the phone, however, we found it to be badly finished with sharp edges — sharp enough to cut paper. The cameras were not bad but the star of the show, its modular features, was badly implemented. The mechanism that enabled the modularity was quite tacky and options for customisation were rather limited.

Priced at par with Samsung’s Galaxy S7 Edge flagship, it’s a wonder that LG expected the phone to do well.

The more recently launched LG V20 fixed the G5’s biggest flaws. The design was simplified, modular features were removed and a secondary display was added. LG’s upcoming flagship, the G6, will be unveiled at MWC 2017 in February. Thankfully, the device will also shed its predecessor’s modular design and stick to a more traditional design.

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That said, the phone is expected to come with a display in a rather unusual aspect ratio of 2:1. This will also enable much slimmer bezels and a comfortable form factor despite the large size of the display, hopes LG.