Cell Phone Market Faces Big Bang
By Kim Tae-gyu
Staff Reporter
Those who want to buy cellular phones are likely to take action this month with Korea's mobile operators ready to open up their wallets in a bid to sign up new subscribers.
The nation's cell phone makers said on Tuesday that the domestic market shrank to 1.76 million units in April, down 11.6 percent from March.
The decrease is notable since the country's three wireless carriers spent a lot of money throughout last month attempting to attract new clients or retain existing ones.
In particular, the second-biggest mobile telephony service provider KTF went all-out to jack up the user pool of third-generation offerings called high-speed downlink packet access (HSDPA).
``People expect handset prices to further go south this month. So they didn't snap up new phones even though they were provided at giveaway prices last month,'' an LG Electronics spokesperson said.
``We expect things will be different in May because mobile carriers have announced the increase of legal handset subsidies. Sales are likely to rise,'' he said.
Currently, local telecom companies can provide subsidies to those who buy new cell phones after reporting the amounts in advance to the government.
Mobile carriers reported last month that the amounts will be raised by as much as 80,000 won starting May.
``May will be critical for KTF and business leader SK Telecom. Their fortune in the 3G rivalry will be partially decided this month,'' said Lee Dong-hwan, an analyst at Meritz Securities.
``Subsequently, the two big operators will shell out big bucks this month. Customers have good reason to wait for cell phone prices to go down in May,'' he said.
In the meantime, Samsung Electronics, the world's third-largest cell phone producer, continued to take the driver's seat in the local market.
Broken down by vendors, Samsung Electronics accounted for 50.3 percent of the April demands, followed by its competitor LG Electronics with 26.7 percent.