Samsung expects profit to be down by as much as 60 percent for the third quarter of its financial year as intense competition in the smartphone market hits its bottom line.
Samsung said it expects operating income of 4.1tn won (£2.38bn) for the three months to September 2014. This is down from 10.16tn won made in the same period last year, a decline of 59.65 percent.
In a note, Samsung blamed this huge decline on the competitive smartphone market which meant that, despite rising shipments, profits in the division are falling.
“The operating margin declined due to marketing expenses related to aggressive promotions and lowered average selling prices driven by reduced proportional shipments of high-end models coupled with price decreases for older smartphone models,” the firm said.
Samsung said it was doing all it can to improve this position, touting forthcoming new devices aimed at the high-end and mid-tier markets.
"To secure sustainable mid- to long-term growth despite intensified competition Samsung is preparing new smartphone lineups featuring new materials and innovative designs, as well as a series of new mid- to low-end smartphones with strong competitive positioning on both hardware specifications and price," said the note.
The firm also said its TV business had suffered due to reduced average selling prices and an "earlier than expected end" to summer sales of home appliance products, such as air conditioners.
The announcement comes after it was revealed that Samsung has already paid $1bn to Microsoft as part of a legal deal for the use of certain technologies in the Android operating system in use on its smartphones.
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