Record high sales of mobile phones helped double profits at the LG Electronics (SEO: 066570) handset division, the Korean conglomerate reported today in its second quarter earnings. Mobile phone sales jumped to 3.754 trillion Korean won ($3.695 billion), up 38.6 percent from a year earlier.

LG said it shipped 27.7 million units, meaning that by some estimates including Goldman Sachs’, the Korean manufacturer has surpassed Motorola (NYSE: MOT) to become the third largest handset maker in the world, just a quarter after steaming past Sony (NYSE: SNE) Ericsson (NSDQ: ERIC), now the smallest of the big five. LG reported that North America had been a particularly strong market for them, accounting for a third of all of their sales. It also singled out premium handsets as being particularly good to them, including strong sales of touchscreen models “Viewty,” and “Venus” as well as its slim “Secret.”

In a separate release, LG announced that the sale of its touchscreen phones had hit the 7 million mark by the end of the second quarter, five quarters after it launched its first touchscreen, the Prada Phone. The touchscreen camera phone Viewty is its top seller, surpassing 2 million units. Venus has sold 1.6 million phones, while the Voyager has sold 1.3 million. The average selling price (ASP) of the 7 million touchscreen phones that LG sold was USD 530. LG’s handset news’ contrasted sharply with Sony Ericsson’s earnings report last week, which partly blamed softening sales of high end phones for its plummeting profits.

But despite the good news in mobile handsets, the company warned that its average selling price (ASP) could fall by 26 percent, blaming the slowing economy, both in developed and emerging markets, as well as increased competition. 

Earnings Release | Conference Call