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Domestic Sales of Premium Smartphones Remain Sluggish
Changing Consumer Tastes
Domestic Sales of Premium Smartphones Remain Sluggish
  • By Cho Jin-young
  • April 23, 2018, 12:32
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Domestic sales of the Samsung Galaxy S9 remain sluggish as consumers prefer low- and medium-priced products.
Domestic sales of the Samsung Galaxy S9 remain sluggish as consumers prefer low- and medium-priced products.

Domestic sales of the Samsung Galaxy S9, the most anticipated smartphone in the first half of this year, are not showing any sign of going up. Sales of the latest model from Samsung have fallen to a level similar to that of previous models.

Sluggish domestic sales are attributed to the standardization of smartphone technology. Korean consumers who preferred premium products have changed their selection standards. Therefore, mobile carriers do not initiate marketing competition any longer, which also contributes to the weak domestic sales.

According to the smartphone industry on April 22, in the domestic mobile communication market, weekly smartphone sales volume in the offline market grew 3.5% from April 5 to 11, but sales of the top 10 models slid 13.9% and the proportion of the top 10 models in the total sales sank 6.8% point to 33.6% week on week.

This sales record is quite unusual as it came shortly after Samsung Galaxy S9 and LG Electronics' V30S ThinQ were launched as strategic smartphones for the first half of this year. Usually, when premium smartphones are released, they enjoy popularity for at least three months. But the total weekly sales of the premium devices also declined from the previous year.

One main reason is the change in the domestic mobile telecom market. Since last year, a 25% discount system for selective contracts has been in place. If a consumer does not receive a subsidy, they can get a discount on service charges. For this reason, most consumers buy mid-priced products instead of high-priced premium smartphones, and get discounts on service charges. Recognizing a shart reduction in subsidies for premium smartphomes, they favori low- to mid-priced products.

As premium smartphones are no longer preferred by consumers, mobile operators are not giving large subsidies for them. In the past, mobile carriers fiercely struggled to attract customers from their competitors by providing generous subsidies when a new smartphone was launched. But now, that kind of practice is no longer necessary. Furthermore mobile carriers cannot cover additional marketing expenses due to a sharp decline in operating profit resulting from the 25% discount for selective contracts.