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Profits down 90% at LG

Profits down 90% at LG

LG has announced a 90 per cent fall in operating profit over the second quarter of 2010, citing big losses from its mobile manufacturing arm, which has failed to capitalise on the smartphone boom.

The South Korean phone maker posted profits of £463 million for the second quarter, a 33 per cent drop from the same period last year.

The decline was attributed to LG's large investments in the world's emerging mobile markets, as it looks to expand its share of the global smartphone market.

In two year's time LG has predicted that it will surpass rival Korean mobile manufacturer Samsung to become the world's second largest producer of phones. This will mean doubling its current market share of ten per cent.

South Korean analyst Ha Eun-mi said that developing a flagship phone should be the cornerstone of LG's strategy in the months ahead.

He commented: "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."

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