Electronics giant Samsung has warned its profits are expected to drop by 25% in the second quarter after competition with rivals on price intensified and the smartphone market slowed down.
The company said competition in China and strong Korean currency was also to blame for the forecast fall to 7.2 trillion won (£4.2bn) in between April and June, down from 9.5 trillion won a year ago which will represent a fall in three consecutive quarters.
The world’s largest mobile phone manufacturer "cautiously expects" a better third-quarter outlook with the release of a new smartphone lineup, lower marketing costs and a seasonal lift in demand for its memory business.
Samsung’s flagship Galaxy Note 4 is expected to hit the market in September.
HMC Investment analyst Greg Roh said: "Samsung is most competitive in the mid-to-high end products, but market demand is being driven in the lower-tier end where the biggest issue is price.
"I think problems for the company's mobile division will continue in the third quarter."
Additional reporting by Reuters
