Polarization of Smartphones
Smartphone makers will release high-end smartphones with a price of 1 million won (US$877) in the second half of this year. With low-end smartphones which are priced at 200,000 won (US$175) being launched one after another, the price difference of smartphones is widening.
According to industry sources on August 16, major smartphone manufacturers will release their strategic flagship smartphones with a record-breaking price in the second half of the year. Samsung Electronics will launch the 64GB Galaxy Note 8 which costs up to 1.32 million won (US$1,158) next month.
LG Electronics is also expected to open the era of smartphones with a price of some 1 million won (US$877). The company’s V30 to be released next month will be priced at 800,000 won (US$702) and the 128GB V30 Plus at some 1 million won (US$877).
Many industry watchers expect that the price of the iPhone 8, Apple's tenth anniversary smartphone, will surpass US$1,000 (1.14 million won). Some even say that it will cost more than US$1,400 (1.6 million won).
The price of smartphones is increasing due to higher specifications. In fact, all the strategic smartphones to be launched in the second half of the year feature a 13-megapixel dual camera, OLED display, and fingerprint and iris scanner or face recognition system. They also has a higher durability such as waterproof and dust protection systems. Accordingly, smartphone manufacturers have no choice but to raise the price.
Contrary to premium smartphones whose prices are increasing, medium and low-end smartphones maintain the similar levels of prices. The gap between the highest price and lowest price of smartphones is growing further.
In addition to the Galaxy A Series priced at 500,000 won (US$439), Samsung Electronics released new models of the low-end Galaxy J Series earlier this month. LG U+ launched the Galaxy J3 at the price of 270,000 won (US$238), while KT launched the Galaxy J7 with the price of 300,000 won (US$264). The Galaxy J3 has the lowest price among smartphones released by Samsung Electronics this year. Considering the fact that the price of the J3 model launched last year stood at 231,000 won (US$203), the current price was slightly increased but the price gap with the most expensive smartphone had widened further.
The price difference between the Galaxy Note 7 and the Galaxy J3 last year was 757,900 won (US$667). Although it is just an estimated figure, the price gap between the Galaxy J3 and the Galaxy Note 8 can reach more than 1 million won (US$880) when the price of the Galaxy Note 8 is set at 1.30 million won (US$1,144).
The price difference between LG Electronics’ premium V and G Series and its lowest X Series is growing wider. The company released the V20 in September last year and March this year with the price of 899,800 won (US$792). The price gap between the highest and the lowest smartphones launched around the same time was 580,000 won (US$511). LG Electronics’ low-end X400 smartphone released in February was priced at 319,000 won (US$281). With the price of the V30 being expected to be at some 900,000 won (US$792), the X500 launched in June was also priced at 319,000 won (US$281), which was the same with the previous model.
In regard to the polarization of smartphones, an official from the industry said, “Since the smartphone market has been saturated, smartphone makers are pursuing the strategy to target niche markets according to customer needs.”