LG has failed to live up to the expectations of market analysts, reporting a 90 per cent drop in operating profits.
The company's operating profit for the second quarter of 2010 slumped by 90 per cent to finish at Won 120 billion ($107 million), down from the Won 620 billion ($553 million) profit it registered for the same period last year.
The company blamed its poor performance on dwindling mobile handset sales and increasing competition from Apple in the smartphone market.
In a statement to the Financial Times, Ha Eun-mi, chief analyst at HI Investment and Securities, said: “LG does not have a smartphone that defines its brand. They jumped into the smartphone market very late, trying to catch up with competitors who started one or two years earlier.”
LG has promised "moderate growth" figures in its third-quarter results, as the company continues to work towards its goal of overtaking Samsung as the world's second largest mobile phone manufacturer by 2012.