Telco compete for 'exclusive phones' in midsummer

The three mobile carriers are releasing low-end phones one after another. With market share competition more intense than ever since the hacking of SK Telecom, the move is aimed at catching customers' demand for cost-effectiveness (performance versus price).

KT (CEO Kim Young-seop) has launched Samsung Electronics' Galaxy Jump 4 at KT stores nationwide and KT's official online mall from Monday. Based on the Galaxy M365G, the Galaxy Jump 4 comes in two colors - black and light green - at 449,900 won (443 U.S. dollars). It features a "circle-to-search" function that provides search results by drawing a circle on an object you are curious about, a large screen of 6.7 inches, a large-capacity battery, and a thin and lightweight device.

SK Telecom (CEO Yoo Young-sang) released the Galaxy Wide 8 on Wednesday, priced at 374,000 won (31 U.S. dollars). The Galaxy M16 released by Samsung Electronics in February is SK Telecom's exclusive model, which comes in three colors: light green, light pink, and black.

In addition, SK Telecom is expected to release Galaxy Quantum 6 based on Galaxy A56 within this year. Rumor has it that it will strengthen its security area by installing quantum security chips.

LG U+ (CEO Hong Bum-sik) exclusively released the Galaxy Buddy 4, a low-cost smartphone priced at 399,300 won on May 9. It is the fourth model of the Galaxy Buddy, a 5G smartphone series exclusively for U+ launched by LG U+ in 2021. It is based on the Galaxy A16 5G model and comes in three colors: blue black, light gray, and gold.

The reason why telecommunication companies are releasing entry-level exclusive phones one after another is that customer demand for cost-effectiveness is steady. The industry believes that there is about 40% demand for mid- to low-priced phones, excluding about 60% of premium phones.

In addition, as the premium phone replacement cycle is getting longer recently, telecommunication companies will focus on the entry-level type of dedicated phones. According to Counterpoint Research, a market research firm, the global smartphone replacement cycle as of 2023 was 43 months, about doubling from 24 months in 2020.

From the perspective of telecommunication companies, if they attract customers for dedicated phones, they will soon become their own telecommunication network customers, so they are actively attracting them.

An industry official said, "The communication pricing plan used by customers is often proportional to the price of mobile phones," but added, "If we attract customers for exclusive phones, it has some effects because we also use our pricing plan."

fun3503@chosunbiz.com