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Samsung logoREUTERS

Electronics giant Samsung reported its lowest quarterly profit in three years because of weak smartphone sales due to stiff competition from Apple and Chinese manufacturers of cheap smartphones.

The South Korean company reported a 60% decline in profit to 4.1tn won ($3.8bn, £2.5bn) in the three months ended in September. It is the lowest profit since the fourth quarter of 2011.

Total sales declined to 47.45tn won from 59.08tn won last year. Sales in the mobile division plunged to 23.52tn won from 35.66tn won last year.

The unit has been facing stiff competition from Apple for its premium smartphone models. Meanwhile, Chinese manufacturers such as Lenovo and Xiaomi posed a threat to its lower and mid end models.

Samsung remained as the No.1 smartphone company in the third quarter, but it was the only top five handset vendor to record a sales decline. Apple, Xiaomi, Lenovo and LG Electronics all recorded more than 15% growth in their smartphone shipments, according to market research firm IDC.

Samsung's shipments fell 8% to 78.1 million smartphones in the third quarter and its market share declined to 24% from 33% last year.

Samsung said market competition is "expected to further intensify."

"Although the company anticipates a demand growth for the recently launched Galaxy Note 4 and new middle-end smartphone models, uncertainty remains," the firm said.

The company said its profit will increase in the fourth-quarter driven by the semi-conductor unit, which performed better than the mobile unit in recent quarters.