Samsung's third quarter earnings report revealed a worsening situation, with earnings at its mobile division collapsing amid cut-throat competition in the smartphone market.
Operating profit fell 60.1 percent on year to 4.1 trillion won ($3.90 billion), in line with guidance it issued earlier this month and marking the weakest outturn since the second quarter of 2011.
Profit for the mobile division slumped to 1.75 trillion won from 6.70 trillion won a year ago, its worst performance since the second quarter of 2011.
"This is really bad. They are getting challenged on both ends of the price spectrum," Bob O'Donnell, founder and chief analyst, Technalysis Research told CNBC.
"Samsung was first out of the gate, with innovations such as bigger screens and other capabilities but the problem is everyone has caught up and there's not a lot more you're going to see in the form factor of smartphones," he said.
The mobile division now accounts for just 43 percent of operating profit, down from 76 percent in the first quarter.
Despite the disappointing report card, Samsung's shares rose almost 4 percent on Thursday.
While Samsung sees improved earnings for its TV and components business in the fourth quarter, it said the outlook for its handset business remains "uncertain."