Samsung’s profits took a dive in the first quarter as its sales were squeezed by an ever-powerful Apple and fast-growing Chinese smartphone rivals.

But the company is confident its new Galaxy S6 and S6 Edge will restore its marketshare, saying demand to date has been above expectation.

“Galaxy S6 sales have been going as well as expected, while demand for the Galaxy S6 Edge has been better than anticipated,” Samsung VP Park Jin-young said during an analyst’s briefing.

Samsung’s net profit for the first three months of 2015 fell nearly 40 per cent year-on-year to 4.6 trillion won, or US$4.3 billion. Sales slid 12 per cent to 47.12 trillion won.

While Samsung’s operations are diverse, including chipsets, consumer electronics and appliances, its mobile phone business is its largest division. In the first quarter, the majority of its profits came from its chipsets – and many of those were shipped to rival phone makers.

A new report suggests in volume terms Samsung has overtaken Apple to reclaim the place of the world’s largest vendor of phones.

Park warned in a statement the rest of 2015 will be challenging.

“Looking ahead to the rest of 2015, despite strong seasonality, competition is expected to toughen for the set business and there is also a risk of weaker demand due to the weak euro and emerging market currencies.

“For the component business, while we expect stable supply and demand conditions, weak demand for set products and increase in LCD panel supply may negatively affect earnings,” he said.