Samsung's smartphone market share is declining in China and other key markets overseas.
Market researcher Canalys on Tuesday said Chinese phone maker Xiaomi accounted for 14 percent of the market in China in the second quarter, snatching the No. 1 spot in the world's largest market from Samsung for the first time.
Samsung's share fell to 12 percent.
The Korean electronics giant led the Chinese market in the first quarter with 18.3 percent, but Xiaomi caught up quickly. Just three years ago, Xiaomi accounted for less than one percent, but the tables were turned when it started rolling out high-performance gadgets at half the cost of Samsung and regularly upgrading software.
Samsung's IT mobile division, which encompasses the smartphone business, saw second-quarter operating profit plunge 31.3 percent on-quarter to W4.42 trillion (US$1=W1,030).
Samsung also ceded its No. 1 mobile phone market position in India to local manufacturer Micromax, which occupied 16.6 percent compared to Samsung's 14.4 percent, according to research firm Counterpoint.
Although Samsung still ranks No. 1 in the Indian smartphone market, Micromax outpaced it overall with low-priced feature phones.
Micromax has been reported as a possible contender to acquire ailing Korean smartphone maker Pantech.
Samsung plans to launch a counterstrike by unveiling its new Galaxy Note 4 smartphone and bolstering its lineup of low and mid-priced products.