SEOUL, South Korea (AP) — LG Electronics Inc. said third quarter profit slid 34 percent as it cut prices and spent more on marketing to carve out a share of the high-end smartphone market.
LG reported Thursday that July-September net income of 108.5 billion won ($103 million) compared with 164.5 billion won a year earlier. Analysts forecast 197.6 billion won, according to financial data provider FactSet.
The result shows the challenges faced by handset makers trying to break into the premium smartphone market dominated by Samsung and Apple.
Samsung Electronics Co. and Apple Inc. reaped 98 percent of profit generated from smartphone sales worldwide in the April-June quarter, according to Counterpoint Research, leaving just 2 percent for other makers to scrap over.
LG blamed higher marketing costs to promote its G2 smartphone and intense competition that forced it to lower prices. Its handset business lost 79.7 billion won despite selling 12 million smartphones. It was first in five quarters that LG's mobile communications business swung into the red.
Quarterly sales rose 5 percent to 13.9 trillion won ($12.5 billion). Operating profit was up 27 percent to 217.8 billion won.
LG was a distant third in the smartphone market after Samsung and Apple in the April-June period, according to Strategy Analytics.