'Official Release' Galaxy Note20, No Increase in Subsidies After All... Will It Damp Enthusiasm?

[Image source=Yonhap News]

[Asia Economy Reporter Joeslgina] The three major mobile carriers have decided not to increase the official subsidies for Samsung Electronics' second half strategic smartphone, the Galaxy Note20, beyond half the level of its predecessor. With the so-called 'stingy subsidies' maintained, attention is focused on whether the Galaxy Note20, which achieved unexpected success during the pre-order period, can continue its momentum after the official launch.

According to industry sources on the 21st, the three carriers?SK Telecom, KT, and LG Uplus?have decided not to raise the official subsidies for the Galaxy Note20, which was officially released that day. The official subsidies set during the pre-order period range from 170,000 to 240,000 KRW based on the highest 5G rate plan. This is about half of the previous model's maximum subsidy of 450,000 KRW. Among the carriers, KT offers the highest subsidy, ranging from 86,000 to 240,000 KRW depending on the rate plan. SK Telecom provides 87,000 to 170,000 KRW, and LG Uplus offers 82,000 to 227,000 KRW.

For consumers, choosing the 25% selection discount is much more advantageous than receiving the official subsidy when purchasing a phone. Currently, the Galaxy Note20 standard model and Ultra model are priced at 1,199,000 KRW and 1,452,000 KRW respectively. The standard model is about 50,000 KRW cheaper than the previous Galaxy Note10's price of 1,248,500 KRW. However, since the official subsidy has been halved, the amount consumers have to pay when purchasing is actually tens of thousands of KRW higher.

The three carriers have stated that there will be no subsidy competition for the time being. Since they recently faced large fines from the Korea Communications Commission due to illegal 5G subsidies, and with major issues such as 5G facility investment and frequency reassignment pending in the second half of the year, they have decided to refrain from the 'bleeding marketing' seen in previous years.

Another factor behind this decision is the increased uncertainty caused by the recent resurgence of the novel coronavirus (COVID-19). Offline sales and dealerships are also expected to be more cautious with subsidy distribution and marketing until the Korea Communications Commission's enforcement order inspection period ends.

An industry insider said, "We consider the atmosphere of competing companies when deciding on subsidy increases, but currently, there are no plans to raise them." Another insider hinted, "Since we have already been fined by the Korea Communications Commission, the mood is to keep a low profile and stay quiet for the time being."

However, there remains a possibility of subsidy competition among carriers depending on the initial success. For carriers, the Galaxy Note20 is a major 'big fish' in terms of sales. Samsung Electronics is also putting all its efforts into the Galaxy Note20 to make up for the poor performance of the Galaxy S20 in the first half. The Galaxy S20, which was hit hard by COVID-19, sold only 60-80% compared to its predecessor and was labeled as an 'unfortunate phone.'

The fact that the Galaxy Note20 also faced the variable of COVID-19 resurgence at the beginning of its launch is considered a key factor for its future success.

To boost sales momentum, Samsung Electronics has decided to provide early Galaxy Note20 buyers with a choice of gifts starting from that day, including the wireless earphones 'Galaxy Buds Plus,' an Xbox Game Pass controller, a Nemonic Mini, or a one-year Samsung Care+ subscription. Compared to the Galaxy S20 launch, when Galaxy Buds+ could be purchased for 99,000 KRW, the benefits have significantly increased. Additionally, pre-order customers will receive benefits such as four months of free YouTube Premium, three months of free Millie's Library subscription, and three months of free Willa subscription.

This content was produced with the assistance of AI translation services.