Uncomfortable Truth
Koreans are voicing their opinion that the price of domestic smartphones should be lowered through a reduction in the factory price. However, consumers themselves reportedly prefer high-end smartphones to cheaper ones.
According to three Korean mobile carriers SK Telecom, KT, and LG U+ on December 3, smartphones in the price range of 800,000-900,000 won (US$754-848) constitute 60% to 70% of the total smartphones that have been sold so far this year.
Unlike Korea, other countries have seen average smartphone prices go down due to a fast distribution of low-priced models.
According to research firm Strategy Analytics, the average price of smartphones in the world was US$299 in the first half of this year, falling short of US$300 for the first time. The figures for the period from Q3, 2011 to Q1, 2012 were between US$320 and US$340.
A source in the mobile telecommunication industry said, “Basically, Korean consumers have higher expectations than those in any other country. And smartphone makers focus on launching aggressive marketing campaigns for premium models, which ultimately have a big impact on consumer choice.”
To take one example, Samsung has released various low-priced models such as the Galaxy Grand (720,000 won, US$678), the Galaxy S4 Mini (550,000 won, US$518), and the Galaxy Win (550,000 won, US$518) so far this year. Nevertheless, the unpopularity of those models has resulted in poor sales, and the increasing number of unsold cheaper smartphones has prompted mobile carriers to give away those devices in return for membership.