Mobile Phones Getting Expensive
By Kim Tong-hyung
Staff Reporter
Mobile phones are becoming more like computers, thanks to advances in electronics and wireless technologies. But consumers are frustrated to learn they have to pay for their handsets much like computers.
Recent sales figures from SK Telecom, the country's biggest mobile telephony operator with more than 50 percent of Korean wireless users subscribing, show that premium phones are taking over the shelves quickly.
The mobile carrier is currently selling 106 handset models at its sales offices and more than 46 percent of the phones are priced at 500,000 won (about $430) or higher. That is about the same amount of cash needed to purchase a "netbook," the minimalist laptop computers that are becoming ubiquitous.
In November last year, only 38 percent of SK Telecom phones were priced above 500,000 won.
Samsung Electronics, which shares a virtual duopoly of the Korean handset market along with LG Electronics, is providing 61 phones to SK Telecom, and 32 of them are priced over 500,000 won.
A total of 20 Samsung phones in SK Telecom's handset lineup are priced within the 500,000 to 600,000 won range, while nine other models are priced around 700,000 to 900,000 won.
The three priciest Samsung handsets fetch over 1 million won each, with a 1.3 million-won price tag attached to the "Giorgio Armani" phone; 1.1 million won for the "AMOLED 12M"; and 1 million won for the "T-Omnia."
The prices of Samsung phones have certainly gone up sharply in recent years. Just two years ago, the company had just 1 handset priced over 800,000 won: the "Super Music" phone.
LG Electronics, Samsung's bitter industry rival, is also focused on promoting lavish devices. LG is providing 28 handsets to SK Telecom, with 13 of them priced over 500,000 won.
LG's "Prada II" is currently the country's most expensive mobile phone, priced at 1.8 million won. Two of LG's other premium phones, the "Prada I" and "New Chocolate Phone," are priced at around 900,000 won.
The proportion of premium phones will only increase in the future, as "smart" phones, which provide Web browsing and multimedia features atop of voice, become conventional.
Electronics makers such as Samsung and LG are putting more emphasis on smart phones, which provide larger margins than conventional handsets.
Smart phones are also critical for carriers like SK Telecom, which are desperate for an increase in data revenue to make up for declining voice sales in the saturated telecommunications market.
And it's hard to expect these types of phones to go easy on the credit card, when they come equipped with sophisticated operating systems, software and liquid-crystal display (LCD) touch screens.
Still, consumers believe that the price hike in mobile phones over the past few years has been at an excessive level, even when considering the advancement in capabilities.
"The Korean handset vendors have been enjoying limited competition in a closed market for years, and local consumers can only take whatever is given to them," said Park Sung-ha, a 32-year-old Seoul office worker and self-admitted tech geek.
"The handset vendors and mobile carriers are only focusing on products with higher margins, and this restricts the choices of consumers who may want simpler and more affordable devices."