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Koreans splash out on pricey phones

Oct 11,2017
Koreans spend more than twice as much money on smartphones than the global average, according to a report released Tuesday by Rep. Byun Jae-il of the ruling Democratic Party, as major phone manufacturers focus on selling premium models in the local market rather than their budget lineups.

Byun, in his report ahead of an annual legislative audit, cited data compiled by market research firm Gartner that showed the average price of a mobile phone in Korea was $514, about 2.6 times the global average of $197 in overseas markets.

The average price refers to total revenue from mobile phones sold between 2015 and the second quarter this year divided by the number of phones sold.

The lawmaker attributed the wide gap to manufacturers’ focus on selling premium phones to Korea’s tech-savvy market. Gartner found that Samsung phones were sold at an average $508 in Korea and $223 in other markets from the beginning of 2015 till June this year, while mobile devices from LG were sold at an average $361 in Korea and $176 overseas. Apple’s iPhones, which have the highest price tag, went for an average $758 in the Korean market and $713 elsewhere.

“These three companies sell lower-priced phones overseas but focus on selling premium phones in Korea, which is why the average selling price of their phones is higher in Korea,” Byun said in a statement.

Gartner noted that while 32 percent of overseas consumers used high-priced phones as of the fourth quarter last year, nearly 88 percent of Korean consumers bought premium models.

Byun pointed out that even though two of the three phone makers cited were Korean, there was no price advantage for Korean consumers buying their phones in the domestic market.

“In the past, we used to buy Sony home appliances when we visited Japan and iPhones when we visited United States because those devices were cheaper there,” Byun said. “However, considering there are not many foreigners visiting Korea to buy cheaper Samsung phones, it is proof that Samsung phones are not any cheaper here than overseas.”

In a survey conducted by Byun and Green Consumer Networks, a local civic group, 75.6 percent of respondents said they felt burdened by monthly phone bills even after carriers raised their discounts last month.

In Korea, cellular subscribers can either receive a lump-sum subsidy from the carrier for a new phone or opt for a discount on their monthly bills.

“It is not enough to lower the burden of household phone bills by merely bringing down subscription fees to mobile carriers,” Byun said. “The government needs to take part in handling high-priced handsets and help local consumers choose from wider phone options by expanding the supply of budget phones.”


BY KIM JEE-HEE [kim.jeehee@joongang.co.kr]