"Self-sufficiency drove demand" Galaxy S21 lowers price, mixed box office results

[Asia Economy reporters Seulgina Jo and Eunmo Koo] "I felt it was a waste to use a telecom plan costing 80,000 KRW per month. I searched a bit to use the ‘self-supply + budget phone’ sweet combo." (Self-supply customer A)

"Why else would they raise the subsidy, which was only talked about as ‘stingy,’ up to 500,000 KRW? The atmosphere is cold." (Mobile carrier agency employee B)

Samsung Electronics’ ambitious strategic smartphone series ‘Galaxy S21,’ launched with lowered retail prices, is seeing mixed early success. While the three major mobile carriers’ pre-order sales, competing with official subsidies up to 500,000 KRW, are below expectations compared to previous years, the share of ‘self-supply’?where consumers purchase smartphones directly through online and offline channels without going through carriers?has tripled.

◆Pre-order Trends... Telecom Carriers Fall Short of Expectations

According to industry sources on the 21st, the Galaxy S21 pre-order sales closing that day are expected to increase by 15-20% compared to the previous model, Galaxy S20. However, since Galaxy S20 suffered from the direct impact of COVID-19, it is hard to call this a hit. Considering the pre-order period was shortened from 12 days for the previous model to 7 days, and pre-orders started the day after the Unpacked event, the performance is seen as decent. A Samsung Electronics official stated, "Overall pre-order sales will be similar to or slightly higher than Galaxy S20."

The detailed results by channel show a clear divide. The three carriers’ combined sales during the first four days starting from the pre-order launch on the 15th are estimated to be less than 150,000 units, about 60-70% of Galaxy S20’s performance during the same period. Even considering the increased official subsidy, a turnaround is unlikely. An employee at a carrier agency located in downtown Seoul said, "While self-supply channels are said to be popular, there aren’t many customers visiting stores," adding, "The response is weaker compared to Galaxy S20 or Galaxy Note20. That’s why they are offering official subsidies from the start."

Samsung Electronics’ decision to lower the Galaxy S21’s retail price to compensate for the previous model’s poor performance did not significantly boost the three carriers’ sales. Despite the actual purchase price dropping to the low 400,000 KRW range, the smartphone replacement cycle has lengthened, and the expensive 5G plans costing over 80,000 KRW per month are seen as a burden. Additionally, the number of customers visiting agencies has decreased due to COVID-19. Marketing funds at the distribution network level are also insufficient. There are predictions that the official subsidies from the three carriers, currently up to 500,000 KRW, may be further increased.

◆Consumers Seeking Sweet Combos... Self-Supply Share Triples

The new smartphone launch effect is mostly benefiting the self-supply channel. The share of self-supply in this pre-order sales is estimated to have risen from around 10% at the Galaxy S20 launch to about 30% this time. The popularity of the so-called ‘self-supply + budget phone’ combo, which has spread since last year, continues this year as well.

On major sites like Phone Ppomppu and Clien, posts such as "I don’t even use 100GB of data, so it’s a waste to use an 80,000 KRW carrier plan," and "After calculating, the ‘self-supply + budget phone’ plan is much more advantageous," are being posted one after another.

Consumers purchasing self-supply phones are not obligated to use specific plans or additional services. Unlike carrier-sold models that require mandatory subscription to 5G plans, 5G phones can be used with LTE plans. Samsung Electronics’ addition of a self-supply exclusive Galaxy S21 Ultra color model and increased purchase benefits through distribution channels like Coupang are also credited with boosting self-supply sales.

As the self-supply trend continues, carriers have actively engaged in marketing through their budget phone subsidiaries. LG Uplus, together with U+ Budget Phone Partners, launched the ‘Sweet Combo Promotion Part 2,’ offering limited-time special plans and gifts to customers who purchase self-supply phones and subscribe to budget phone plans. Since the first promotion last year, customers joining U+ Budget Phone with self-supply phones have grown about fourfold.

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