"Right After the CSAT, Heading to the 'Seongji'... Illegal Subsidies Targeting Test Takers on the Rise"

2023 CSAT Two Days Away
"Will Change to iPhone14" Waiting Demand from Examinees
Disappointing iPhone14 Standard Model Also 'Popular'
Overall iPhone Stock Low, Supply Shortage
Demand at Sacred Places Continues Despite Violating Mobile Law

On the afternoon of the 14th, I visited mobile phone stores on the 9th floor of Sindorim Technomart to inquire about subsidies for the iPhone 14 series. Photo by Cha Min-young

[Asia Economy Reporter Cha Min-young] With the 2023 College Scholastic Ability Test (CSAT) just two days away, test-taker Kim Min-jung (alias) plans to purchase Apple's new iPhone 14 series as soon as the exam is over. Across the three major telecom providers, the notoriously low official subsidy for the iPhone series, ranging only from 110,000 to 150,000 KRW, has led her to visit a nearby 'mobile phone sanctuary' to try to reduce costs even slightly. Even the cheapest model exceeds 1 million KRW by a large margin, making it burdensome to pay full price for the device outright.

On the afternoon of the 14th, at four stores on the 9th floor of Sindorim Technomart, when applying the 89,000 KRW SK Telecom plan with a selection contract, the iPhone 14 standard model (basic and Plus(+)) trade-in subsidy was offered around 400,000 KRW. Although there were differences between stores, most offered between 380,000 and 420,000 KRW. The iPhone 14 128GB model has a retail price of 1.25 million KRW, lowering the actual purchase price to the mid-800,000 KRW range. LG Uplus, which offers the highest subsidy among the three carriers, required an additional subscription to value-added services worth 50,000 to 100,000 KRW as a condition.

The iPhone 14 Pro models (Pro and Pro Max), starting at over 1.5 million KRW, received only about 200,000 KRW in subsidies even under contract renewal or device change conditions. This is about half the amount for the standard model and is a meager subsidy compared to competitor products like the Galaxy Z Flip4. For the Z Flip4, the actual purchase price for the 256GB model dropped to around 470,000 KRW, which is one-third of the retail price (1,353,000 KRW) when combining official subsidies and additional support. Overall, it was hard to notice much difference compared to the pre-order period for the iPhone 14 series two months ago in September.

On the 7th, when Apple's new iPhone 14 series was officially released in Korea, citizens were examining the products at the Apple Store in Myeongdong, Jung-gu, Seoul. Photo by Moon Honam munonam@

Some posts on online communities and KakaoTalk secret chats recently claimed that subsidies for the iPhone 14 standard line had increased to 600,000 to 700,000 KRW, but this was not the case in reality. The standard line remains popular despite consumer disappointment due to the notch not disappearing and the use of the same A15 chip as the iPhone 13. A sales staff member at store A said, "Due to the closure of Apple's factory in China caused by COVID-19, supply has decreased overall regardless of standard or Pro models. Apple traditionally does not offer large subsidies, so its structure is completely different from Samsung's."

The possibility of increased subsidies for the iPhone 14 series after the CSAT is limited. Although there is high waiting demand from test-takers, product supply is not smooth. Stores said, "Telecom companies will hold events after the CSAT next week, but there won't be significant price differences." Many posts on online communities appear to be from presumed test-takers. One community user lamented, "I'm planning to switch to the iPhone 14 Pro on the day of the CSAT, but I'm worried if there will be enough stock."

The reality behind the subsidies is illegal bonuses. Although this violates the current Act on the Improvement of Distribution Structure of Mobile Communication Terminals (the Terminal Distribution Act), consumers welcome it. Unlike Samsung, which offers separate subsidies, Apple’s characteristics leave consumers no choice but to rely on telecom companies. A Broadcasting and Communications Commission official said, "Since the economic situation is difficult, telecom companies seem to have increased incentives to stores in the second half of the year," adding, "The 'sanctuary' issue is a chronic problem."

Since the enactment of the Terminal Distribution Act in 2014, there has been a clear trend of telecom companies reducing subsidies. According to statistics from the Korea Telecommunications Operators Association (KTOA), the number of mobile number portability (MNP) cases decreased for five consecutive years from 2017 to 2021. This year, only January exceeded 400,000 cases per month. Although October saw a slight increase compared to September, the number of cases in the second half of the year fluctuated. KTOA explained that it is difficult to say there is an upward trend. In fact, stores evenly distribute subsidies between number portability and device changes, so they do not encourage excessive number portability.

Some niche strategies targeting cost-effective consumers turning to previous models instead of the iPhone 14 series are also emerging. KT raised the official subsidy for the iPhone 12 series to between 500,000 and 700,000 KRW on the 1st of this month. When the iPhone 12 Pro and Pro Max were released two years ago, the official subsidy was only 147,000 KRW, so this is an increase of over 550,000 KRW. SK Telecom and LG Uplus offer official subsidies for the iPhone 12 ranging from 110,000 to 500,000 KRW and 400,000 to 550,000 KRW, respectively.

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