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Smartphone Makers Roll Out Cheaper Models in Slow Season

2015/07/26 | 656 views | Permalink | Source

From left, Samsung's Galaxy A8 and Galaxy J5, and LG's Band Play and Magna

July and August have usually been slow seasons in the smartphone industry, but Samsung and LG are trying to get ahead of the trend this year as the market becomes saturated.

Samsung unveiled the Galaxy A8 on Tuesday and the Galaxy J5 the next day. There will also be a 3G folder-type Galaxy late this month.

LG late last month unveiled the Band Play and Magna smartphones that cost between W200,000 to W300,000 (US$1=W1,163).

All of the smartphones being unveiled in this year's slow season are mid-priced models.

◆ Surging Demand

According to SK Telecom, in September last year 60 percent of new smartphone users bought high-end handsets that cost more than W700,000 and only 20 percent models that cost less than W400,000.

But the proportion of high-end smartphone purchasers fell to 47 percent in the second quarter of this year, while low-end buyers surged to 45 percent, demonstrating a marked shift.

The main reason behind the shift is the scrapping of handset discounts in October last year.

Samsung and LG are rolling out lower-priced smartphones that still retain premium quality. The Galaxy A8 has metallic components like the S6 and is only 5.9 mm thick, the slimmest in Samsung's arsenal. The A8 also comes with a 5.7-inch full HD monitor that is bigger than screens on the S6 but costs W649,000 or around W200,000 less.

The Galaxy J5 is even cheaper at W297,000, but features a 5 megapixel front and 13 megapixel rear camera.

LG's new mid-priced smartphones all feature the auto self-camera and other functions available on the high-end G4 model. They even have a new "focus mode" that lets users concentrate on their work by cutting off data and Wi-Fi as well as automatically rejecting phone calls.

The function is designed for students in lectures or office workers in meetings. The Band Play costs W350,000, while the Magna costs W264,000.

◆ Tie-Ups

Another interesting trend this summer is tie-ups between smartphone makers and telecoms.

The Galaxy A8 and Band Play smartphones are only sold via SK Telecom. The Galaxy J5 is being sold by KT under the brand "Sense".

Industry watchers say tie-ups and selective distribution benefit both manufacturers and telecoms. Rising smartphone sales translate into profits for carriers, while manufacturers do not have to worry about wrinkling their premium image by distributing large volumes of cheaper handsets to all carriers.

An SK Telecom staffer said, "Demand for mid- to low-priced smartphones should continue even after the latest premium models are unveiled in the fourth quarter".

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