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| Samsung Electronics' Galaxy S20 smartphones / Courtesy of Samsung Electronics |
By Baek Byung-yeul
Ahead of the official release of Apple's new budget iPhone SE, and with the country's leading mobile carriers moving ahead with plans to win more fifth-generation (5G) subscribers, Samsung Electronics is helping SK Telecom, KT and LG U+ lower their inventories of its flagship S20 Galaxy by providing them with more subsidies
Industry officials said Sunday that the top three carriers have doubled the amount of subsidies for the S20s ― passing on those from Samsung ― to boost sales.
SK Telecom, KT and LG U+ have increased their subsidies for the smartphone by up to 500,000 won ($408) since May 1.
The increase comes two months after the carriers began selling the S20, which supports 5G networks, Feb. 27. It is seen as a move to boost sales in the wake of the havoc wreaked on the local smartphone market by the COVID-19 pandemic.
Samsung expects the increased subsidy will help better position itself in the market as its competitors release new models ― including the iPhone SE ― next week. Expected to be a big hit with consumers, the iPhone SE is the first "affordable phone" released by Apple in four years. Its overall features are comparable to iPhone 8, while it has the same processor as the iPhone 11.
A Samsung official would not comment on S20 inventory, however, industry officials estimate the company has seen 20 percent to 40 percent lower sales compared to those for the Galaxy S10, released in the first half of 2019.
In terms of subsidies, LG originally offered between 97,000 won and 202,000 won for the Galaxy S20, but has raised this to between 326,000 won and 500,000 won. Subsidies differ depending on subscription plans.
On the same day, SK Telecom raised its subsidy to between 285,000 won and 420,000 won, from 100,000 won and 170,000 won; while KT now offers between 250,000 won and 480,000 won ― up from 103,000 won to 243,000 won.
Given Samsung is also set to release mid-range priced 5G-enabled smartphones this month, it remains to be seen whether the company can find a breakthrough in the coronavirus-hit market. But the top smartphone manufacturer is expected to expand its alliance with the local carriers to lift sales as it regards South Korea as a litmus test for its "all things 5G" businesses.
The Ministry of Science and ICT said there were 5.77 million 5G subscribers here as of the beginning of April, a 5G penetration rate of 9.7 percent, the highest in the world. In terms of the number of subscribers, the country ranked second after China. South Korea claimed to be the first country in the world to launch full 5G commercial services, last year.
Meanwhile, the pandemic has frozen demand for smartphones worldwide and "idling demand" from consumers toward high-end models has yet to be awakened. Samsung expects to ship between 230 million and 250 million smartphones in 2020.
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