New devices like the LG G3 have helped LG Electronics (066570: Korea SE) sell a record number of smartphones during the second quarter of 2014 and have helped the company’s mobile sector turn a profit for the first time in a year.
The South Korean manufacturer reported a profit of $83.4 million out of a total $3.51 billion in sales and considers its success a sign of change within the mobile industry. While top manufacturers like Samsung Electronics Co. (KRX: 005930) are reporting losses for the recently passed quarter, formerly struggling phone makers like LG and HTC Corp. (TPE: 2498) are tapping into hardware innovation to gain attention from consumers.
Though LG used the catchphrase “Simple is the new smart” when announcing the LG G3 in March, the flagship smartphone includes a number of features that are far from modest. In particular, the LG G3 includes a Quad HD 2560x1400 resolution display, one of the most advanced smartphone displays currently on the market. The device also includes features like its 13-megapixel camera with optical image stabilization and its 3GB RAM and 32GB internal memory options. Dr. Ramchan Woo, head of smartphone planning at LG described the G3 as a device with complicated technology that doesn’t require a user to read the manual, at its March unveiling.
June reports indicated that the LG G3 was outselling the rival Samsung Galaxy S5 3-to-1 in South Korea. Notably, both companies are based in South Korea. The LG G3 became available at major U.S. mobile networks in July.
LG may have shipped over 900,000 units of the LG G3 during the second quarter, according to analysts. But the flagship accounted for only a fraction of the total 14.5 million LG smartphones sold during the second quarter. The manufacturer has a number of mid-range devices within its L-Series that are gaining popularity due to their affordability and LTE wireless data capabilities. The recently announced LG G3 Beat, is a mini version of the LG G3, bringing many of its features to a lower price point. LG is also the manufacturer of other popular devices like the Nexus 5 smartphone sold by Google Inc. (NASDAQ: GOOG).
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To keep up momentum, LG plans to focus on marketing this quarter during the current quarter, which could prove a challenge as major rivals such as Samsung and Apple Inc. (NASDAQ:APPL) prepare to release new flagship devices. The Samsung Galaxy Note 4 and Apple’s rumored large-screen iPhone 6 are both expected to be announced in September.