LG Electronics doesn't appear to be keeping pace with the likes of HTC, Motorola and Apple, as the company's net profits plunged 26 percent in the second quarter on lagging mobile device sales.

LG reported sales of $12.4 billion and operating profit of $108 million in the second quarter of 2010.

LG Mobile Communications shipped 30.6 million units this quarter, an increase of 13 percent sequentially and 2 percent year-over-year as a result of continued growth in emerging markets and the introduction of new smartphones such as Ally and Optimus Q, according to a press release.

Nevertheless, sales increased only 5.8 percent sequentially but fell 29.5 percent year-over-year. Operating profit margin for handsets recorded a loss year-over-year due to investment in R&D and expansion into new markets.

The company said it expects to see modest growth in the third quarter of 2010. LG also said it will continue to introduce new products in major categories including smartphones while investing aggressively in R&D and marketing and developing premium products "in order to secure a stronger position in respective categories."

Meanwhile, LG announced the opening of a revamped LG Application Store, which it says features more than twice as many apps, targeting users of both feature phones and smartphones. The revamped LG Application Store opens today in 23 markets with 3,000 apps.