Consumers in South Korea are becoming more disinterested in buying new smartphones due to high smartphone price caused by the latest Telecom Act, which caps handset subsidies. Plus, they simply don’t find much difference between new and old smart devices.
According to the local telecom industry on Tuesday, the number of consumers who use Samsung’s old Galaxy series, which were launched two years and more ago, stands at around 10 million. The figure is around one-fourth of total smartphone users in South Korea.
If taking account into other products made by Apple, LG Electronics and Pantech, the number will go up, according to a local telecom operator.
South Korea was once an ideal testbed for new smartphone makers with a number of early adopters, but recently, more consumers incline to keep their existing smartphones. The Telecom Act carried out last year to strictly regulate subsidies to attract new subscribers has had a negative impact on the smartphone purchase.
Apart from the act, analysts say that consumers simply find it unnecessary to buy new phones competitively poured out every year. The upgraded versions of smartphones are no longer key factors to attract new consumers.
“With new smartphones being rolled out one after the other, consumers seem to think that there is no dramatic innovation in the phones,” a market watcher said.
Rather, the demand on old smartphones has been increasing as consumers find it no difference between new and old in terms of functions and designs
The price discrimination between local and overseas markets also play a role in making local consumers shun away from high-end smartphones made by local makers such as Samsung Electronics.
According to data revealed by Moon Byung-ho, a lawmaker of the New Politics Alliance for Democracy, the price of Samsung’s new smartphone Galaxy S6 averaged 825,000 won ($757) in nine countries including the United States and Japan, 4 percent down from 850,000 won sold in the local market.
The price gap is even higher in the U.S. market and the Canadian market where they are sold at 700,000 won and 750,000 won respectively
“The government should regulate the unfair practices of the smartphone makers, which constantly discriminate local consumers,” Moon said.
According to the data revealed by the Korea Telecommunications Operators Association, local consumers who bought new smartphones dropped from 756,000 units in January to 450,000 units in April.
By Chun Go-eun
