LG chump change in Korean smartphone market
We’ve talked about the financial tightrope that Samsung Electronics seems to be in. We’ve talked a lot. But while the fight against Apple in the Korean market appears to turn up a slow retreat for the country’s number one smartphone manufacturer, keep in mind that it ain’t all pretty roses for the number two, either. New information about average smartphone prices for each brand paints a picture of heavy discounts for LG Electronics.
Mobile carrier SK Telecom released average prices for smartphones sold under LG’s, Samsung’s and Apple’s banner for subscribers to the company’s 60,000 KRW (51 USD as of this post) tier plans. For the 17 LG-branded smartphones offered at the service provider, the average sales price came to 175,341 KRW (150 USD). Samsung’s phones went for an average of 414,357 KRW (354 USD) while Apple’s iPhones sold at around 858,533 KRW (733 USD). That last number suggests that most buyers, even at two-year contract-subsidized prices, bought either previous generation iPhones or the 16GB iPhone 6.
It’s apparent that even with LG’s high-end models, price cuts have taken place at the carrier. There may be a similar story going on at other carriers. LG’s mobile division’s Q2 revenues came in flat year-over-year, but its operating profit was cut by 99.7 percent. The source says the data implies that LG is taking pennies for the sales margin on its phones. Shipments have dropped three percent for Q2 year-over-year to 14.1 million units, though the company says its LTE phone shipments broke past the 8 million unit mark, or 57% of total smartphone shipments.
Stateside, we’ve seen the LG G Flex 2 selling at half the original price these days within the same year its been released, so the depreciation isn’t isolated.
Source: Korea Herald