Samsung Makes Worst Quarterly Profit In 2 Years

Samsung Electronics has reported a decline of almost 20% in second quarter’s net profit due to tough competition from inexpensive Chinese phones.

It posted a net profit of $6.1 billion – its lowest figure in two years – down 19.6% from the corresponding period last year.

"The second quarter was affected by several factors including the slow global sales of smartphones and tablets and escalating marketing expenditure to reduce inventory," the company said in its earnings report.

"The appreciation of the Korean currency also chipped away at this quarter`s operating profits, which amounted to about 500 billion won in missed revenues prompted by the foreign exchange market," it said, adding that the second half of 2014 would "remain a challenge."

The won, South Korean currency, is currently at six-year high against the US dollar, affecting South Korea`s export-driven economy.

The next quarter, too, is likely to see tough competition with the likely launch of iPhone 6 by Apple.

The South Korean electronics giant has a diverse product line ranging from memory chips to home products, but more than 50% of its profits are generated by mobile devices.