Galaxy S22 plunges in value after GOS controversy

Samsung Electronics' Galaxy S22 smartphones are displayed at the company's store in Seoul, March 8. Yonhap

By Baek Byung-yeul

Mobile carriers have sharply raised their subsidies for Samsung Electronics' high-priced Galaxy S22 smartphone to bolster sagging sales amid a controversy over the game optimizing service (GOS) installed on the device, which adjusts the handset's performance when playing games, according to company officials Monday.

Samsung was criticized for the GOS application installed in its Galaxy devices. The GOS is designed to optimize the performance of Galaxy devices when playing games, but users found that the service cannot be turned off manually, which has resulted in lower quality while playing. In response to the consumer backlash, the company provided software updates that do not limit device performance until the phones become hot.

KT and LG Uplus said they have raised their subsidies to mobile service subscribers who purchase the Galaxy S22 and the Galaxy S22 Plus by up to 500,000 won ($410). The mobile carriers already raised the amount of subsidies for the Galaxy S22 Ultra to 500,000 won last month.

The new Galaxy S series was released in the domestic market on Feb. 25 and the purchase price has already dropped by less than half. KT decided to offer up to 450,000 won in subsidies for users who purchase the Galaxy S22 and subscribe to a monthly plan of over 90,000 won. It will offer 500,000 won in subsidies for the Galaxy S22 Plus. LG Uplus also decided to offer the same amount of subsidies for each model with a monthly plan of over 85,000 won. The amount has more than tripled from previous subsidies of 150,000 won.

The industry view is that Samsung and mobile carriers increased the subsidies to overcome sluggish sales of the Galaxy S22 series due to the GOS controversy.

"The amount of subsidies that will be provided is something that our company and mobile carriers decided together after a consultation," a Samsung spokesman said.

"Currently, the device market is generally in a difficult situation, so the subsidies were raised starting on April 1," the spokesman added.

An official at a local mobile carrier said, "There is a view that the GOS issue adversely affects the sales of the S22, but there is no clear decline in terms of sales volume."

"There is demand for devices not only from those who play games, but also from those who do not play games. There has been controversy over the GOS, but there are two high-end smartphone brands ― Samsung's Galaxy S series and Apple's iPhone ― so we don't see a clear sales decline of the Galaxy devices," the official said, on condition of anonymity.

Lee Seung-woo, an analyst at Eugene Investment & Securities, said Samsung's mobile devices and network business is expected to post an operating profit of 4 trillion won in the first quarter, up 1.3 trillion won from the fourth quarter of 2021, due to the strong global smartphone market.

However, the analyst questioned Samsung's future prospects, saying, "The GOS controversy left a big scar on the credibility of the Galaxy and Samsung brands."

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