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At last, some glimmers of hope for LG's smartphone push, as the company's wireless division reported a lower quarterly loss than analysts had expected. The Korean firm's stock enjoyed its biggest leap in a month on the news, as investors hoped its mobile turnaround plan was finally starting to deliver results.

The handset unit reported a loss of KRW53.9bn ($51m) for the second quarter, far smaller than the KRW80.2bn predicted by analysts surveyed by Bloomberg, and the narrowest loss for the past five quarters. That helped overall operating profit for the Korean group to rise by 25% year-on-year to KRW158.2bn, also ahead of forecasts. But group net income fell 87% to KRW108.4bn after the LG Display unit reported a 96% profit nosedive, worse than markets had anticipated.

LG has recently sought to reposition its Optimus Android smartphone family, moving away from its low cost, midmarket stronghold - where it is under pressure from price wars and Chinese competition - towards the high end. In particular, it has released its first really high profile and differentiated smartphone, the Optimus 3D. It is targeting sales of 1.7m 3D models by the end of the year, and a smartphone total for 2011 of 24m, improving handset profitability.

In November, the more mass market Optimus One became LG's first smartphone to cross the 1m unit milestone, taking about 40 days to reach that goal.

"Their losses from mobile phones continue to narrow," Kwon Sung Ryul, an analyst at Dongbu Securities in Seoul, told reporters. "We're paying attention to the structural change in their smartphone business." But LG's share of the total handset market has fallen - from 7.6% to 5.6% in the first quarter, according to Gartner figures.

Meanwhile, LG continues to be overshadowed by its compatriot Samsung. The larger firm says it sold 5m units of its new Galaxy S II devices in its first 85 days, and that was without a US launch yet. This shows faster uptake than Samsung's breakthrough Android model, the Galaxy S, which took 125 days to reach 5m. The company now expects the S II to reach the 10m mark faster than its predecessor, which took seven months to hit that target.

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