Operating profit was estimated at
The Q2 operating profit was down 15.2 percent from the
The profit drop had been widely expected, but Tuesday's forecast still missed collated analyst estimates.
Samsung did not provide net income or details of division earnings ahead of the official earnings report to be filed later this month.
In an unusual move, Tuesday's forecast was accompanied by an explanatory note that the company said was to "address market and investor concerns" prior to the audited earnings release.
"The company witnessed a slowdown in the overall smartphone market growth and saw increased competition in the Chinese and some European markets," the note said.
"This led to higher inventories for the medium- and low-end smartphones," it said, adding that earnings had also been hit by the appreciation of the Korean won against the dollar, euro and most emerging market currencies.
Samsung Galaxy S5 is powered by 2.5GHz processor along with 2GB of RAM
The surging won is currently running at six-year highs against the dollar, impacting
Sales in April-June stood at
'Cautious' hopes for Q3
Samsung said it "cautiously expects" a more positive outlook in the third quarter with the release of its new smartphone lineup, and a much lower marketing spend compared to the second quarter.
However, the next quarter will also see the competition heat up with the expected launch of the iPhone 6 by chief high-end rival Apple.
The company acknowledged that "price competition" in
Samsung does not disclose smartphone shipments, but analysts say it moved around 78 million units in the quarter ended
Alarm bells have been sounding for a while over Samsung's reliance on smartphone sales in mature markets such as
Samsung's Galaxy Gear 'smart' wristwatch can make calls, shoot video, run apps signal incoming messages. PHOTO/AFP/Getty Images
The world's largest smartphone maker has a diverse product line ranging from memory chips to home appliances, but more than half of its profits are generated by mobile devices.
"Samsung is suffering from a global market shift toward low-end products and it had to up its marketing spend to reduce the inventory of its high-end handsets," said
"The fundamental problem for Samsung is that the global handset market has become saturated and demand is moving toward low-priced handsets, where there is intense competition, especially from
The market had largely factored in the profit drop and Samsung shares were trading up 0.3 percent as of
Samsung's profit drop had been widely expected. PHOTO/AFP
April saw the global roll-out of the latest version of its flagship Galaxy series smartphone, the Galaxy S5, which came with a free premium software bundle valued at more than
Initial sales of the S5 were positive, although critics said it offered little in the way of real innovation to set it apart from the iPhone and the Chinese phones.
There is a general consensus that smartphone evolution has hit a barrier that will only allow incremental improvements on existing design and technology, rather than market-changing reinvention.
Samsung maintained a leading position in the global smartphone market in the first quarter of 2014, but its market share fell for the first time in four years to 31.2 percent from 32.4 percent a year ago.
Also related to this story
Samsung's new Tizen phone touted for bigger things
Samsung, LG launch Android Wear smartwatches
Samsung Galaxy S5 review
New Samsung phone marks break from Android
Most Popular Stories
- Shia LaBeouf Plea Deal, Alcoholism Treatment
- Stop-Start Engines Save Gas, Reduce Emissions
- Ohio State Band Chief Fired After Probe
- Hispanic Leader Goes the Extra Mile
- Ricky Martin Joins 'The Voice ... Mexico'
- Morgan Stanley Ponies Up $275 Million to Settle SEC Charges
- Ukraine Says Russians Firing Across the Border
- Ford Q2 Net Profit up 6 Percent
- Jennifer Lopez, Pitbull to Perform at Fashion Rocks
- U.S. Weighs Refugee Status for Immigrant Kids