By Kim Yoo-chul
LG Electronics, Korea's No. 2 smartphone producer, plans to take on two leading Chinese producers - Xiaomi and Huawei - in a pre-emptive measure to offset the effects of "China attacks" on the local mobile industry.
On Monday, LG said it will begin selling its latest cheaper smartphone dubbed as "K10" starting January 14 with the country's three mobile carriers from SK Telecom, KT and LG Uplus.
The suggested retail price for the LG mobile will be around 200,000 won per unit without subsidy from the domestic telecoms. A consumer who signs up with one of the carriers for a monthly pricing plan may get the LG phone for less than 60,000 won, according to LG officials.
"The reason why LG is strengthening its budget mobile lineup is because of growing influence of cheap Chinese devices to local consumers. If LG fails to get support from domestic consumers, then it will make things much more complicated in other markets," said an executive at one of LG's technology affiliates by telephone.
Such growing concerns are because of the explosive growth of Chinese phones such as Xiaomi and Huawei because the Chinese manufacturers have burned LG and even the global leader Samsung Electronics in the Chinese market.
Samsung was far and away the top selling phone in China until early 2014. It has since that time plunged to No. 5. LG's position in China, the world's single biggest mobile market, was pushed back out of the "top 5" list.
"Competition will be getting much fiercer. LG sees solid demand for premium mobile phones; however, we have to admit that more consumers prefer to purchase less expensive phones with better pricing and competitive features," said another LG official.
Such a trend is also pushing local carriers to promote affordable phones.
SK Telecom will start receiving orders of its "Idol 3" smartphone manufactured by Alcatel One Touch sometime this week. Suggested retail price for the Idol 3 will be around 300,000 won per unit without a subsidy plan.
The smallest local carrier LG Uplus said the Huawei Y6 model has so far sold over 10,000 units a month since its launch.
While experts say the growing popularity of "made-in China" phones will have limited impact on Samsung, the world's biggest smartphone manufacturer is also planning to release its new budget models in Korea to prevent market share decline, according to Samsung officials.
Samsung's new "Galaxy A" model will be available this week through the three local carriers.
With an appealing design, the A model will support the Samsung Pay mobile payment system and be featured with an advanced camera.
The A series will be available with three variants ― 5.5-inch, 5.2-inch and 4.7-inch screens, according to sources.
The suggested retail prices for the devices will be between 300,000 won and 500,000. Samsung decided to ride on budget phones after it released "Galaxy J7" last November.
Consumers waiting for new budget models will experience advanced hardware features, meaning that the cheap prices don't mean lesser quality.
The Idol 3 is equipped with a 5.5-inch full high-definition screen with the device embedding an octa-core application processor and 13-megapixels.
The LG's K10 will support a 5-megapixel front camera and a 13-megapixel rear camera in a 5.3-inch high-definition screen.
"It remains to be seen whether the growing preference for budget mobile phones in Korea may bring real change, so long as premium phones continue to sell well. Samsung and LG can't afford to sell their top phones any cheaper than they are selling them now," said one official.
On a related note, the No. 2 mobile carrier KT recently suspended selling the Xiaomi brand smartphones only two days after it started selling them at its online shopping site Interpark in what officials say revolves around legal issues.