LG’s mobile business saw a 24 per cent year-on-year increase in mobile device sales but profitability was hit by increased competition and marketing costs.

LG’s Mobile Communications Company shipped 12 million mobile devices during the third quarter, only just missing its record sales of 12.1 million seen in the prior quarter.

The division recorded revenue of KRW3.05 trillion ($2.75 billion) for the period but saw a negative operating margin of -2.6 per cent, leading to a KRW80 billion loss, the first after four profitable quarters.

The loss was attributed to a fall in average selling price of devices and higher marketing costs associated with the G2 flagship smartphone, launched in August (pictured).

Sales of 3G-enabled devices declined due to increased competition in emerging markets, but sales of LTE-enabled devices were healthier, increasing by 31 per cent compared to the prior quarter.

LG said it expects overall market competition to intensify as handset makers diversify their portfolios although the smartphone market, and LTE-enabled devices in particular, will continue to grow.

The South Korean tech giant plans to focus on increasing sales in the premium smartphone sector by launching the G2 globally, and increasing marketing around its LTE-enabled and 3G mid-tier devices to boost sales during the holiday season.

LG as a whole reported consolidated net income of KRW109 billion for the period, a 33.9 per cent year-on-year decline. It generated consolidated revenue of KRW13.89 trillion, which was 12 per cent up on the same quarter in 2012. However it represented the lowest quarterly revenue reported by the company during 2013.

Unfavourable foreign currency exchange rates affected overall revenue, as did decreased sales of LCD TVs in developed markets, due to slow market demand.