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Lackluster sales of LG G5 shoulder part of the blame for LG’s $224M quarterly loss

Why it matters to you

LG had a rough year, which is likely frustrating for the company. On the bright side, that failed year may result in much better phones from the company in 2017.

LG has had a tough few months. The G5 did not live up to the company’s expectations of success, and the latest quarterly results are seriously disappointing — the company just announced a $223.98 million net loss for the fourth quarter of 2016, and that loss is largely due to another lackluster quarter from the company’s mobile division.

The loss is a serious step back for the company, which reported pretty hefty profits in the fourth quarter of 2015, only one year earlier. In that quarter, the company reported a massive $12.79 billion in profit.

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LG largely blamed the mobile division for the loss, as well as lackluster performance from its auto components unit.

So why did the mobile division perform so badly? Simple — LG took a risk, and it did not pay off. The LG G5, which was LG’s flagship phone for 2016, offered a bold, new modular design that gave users the ability to swap out part of the phone for new modules. The system was interesting, but it was also largely cumbersome, especially compared to other modular systems like Motorola’s Moto Mods.

According to most rumors, the G6 will take a different approach — which certainly makes sense. The G6 will most likely be launched at Mobile World Congress at the end of February, and will feature an edge-to-edge display, and do away with the frustrating modular system.

Still, the quarter wasn’t as bad as it could have been. LG said that it has seen “strong sales” of the LG V20, which also offers flagship specs and was launched in October. Not only that, but 2017 could be a much better year for LG. Apart from the aforementioned G6, LG is working with Chevrolet on its upcoming electric car, so the automotive division could do better as well.