Pantech, however, was reportedly embarrassed by LG U+’s “good-will” gesture; Though it was true that the sales for Pantech’s flagship model have been quite slow but LG U+’s official announcement came too early and seemingly arbitrary on its own, an official with the smartphone maker said regarding this matter. (image: Pantech)
SEOUL, Korea, April 21, 2014 (Korea Bizwire) – A ripple effect caused by Samsung Electronics’ pricing policy shift on its recently launched Galaxy S5 model and the business suspension on the local wireless carriers have seen unexpected situations in the local market.
The domestic telcom industry set to stage a kind of discount campaigns for their smartphones available in the market – to the extent that the local consumers are willing to open their wallets to change the models or buy new ones. In this vein, the wireless carriers also argued their ‘good-will’ gestures sort of might help Pantech, which is in dire financial trouble, recover their lost sales for the past months.
Korea’s telcom market has been so slow due to recent suspensions on all three mobile operators: SKT, KT and LG U+. And in its apparent attempt to “thaw” the frozen market, Samsung Electronics shifted its pricing policy for the recently launched Galaxy S5, setting the price for the model at about a range of 100,000 won cheaper than that of the previous models within the lineup.
Samsung’s move has resulted in a chain reaction across the industry prompting them to lower the storefront prices of smartphones in general. And LG U+, No.3 mobile service provider, has showed a timely marketing strategy, saying it will considerably lower a Pantech’s flagship model’s prices, in a token that it has stepped forward to save Pantech, which is also reportedly in possible M&A negotiation with India’s No.2 smartphone maker Micromax .
On April 18, LG U+ announced that the company has agreed to offer Pantech’s Vega Secret Up (IM-A900L) at the price of 599,500 won, which is about 37 percent lower than the previously regular price of 954,800 won. At LG U+, which is the only wireless carrier in operation currently while KT and SK Telecom are being suspended, a Vega Secret Up will be sold at about 300,000 won with a legal subsidy of 270,000 won until April 26.
An LG U+ official said, “Pantech has been going through a tough time since the market froze so we plan to help out Pantech and offer a better deal for our customers at the same time.” Pantech, however, was reportedly embarassed by LG U+’s “good-will” gesture; Though it was true that sales for Pantech’s flagship model have been quite slow but LG U+’s official announcement came too early and seemingly unilateral on its own, an official with the smartphone maker said regarding this matter.
A mark-down of the retail price as such is usually achieved by the manufacturer after gathering opinions of the nation’s three mobile service providers. However, the current situation involving a series of suspensions did not allow taking such a “prerequisite” step to reduce the retail price. The LG U+ official said, “Since LG U+ voluntarily has taken the lead to lower the selling price, other companies might also join forces to help Pantech by offering similar deals.”
An official in the industry also confirmed saying, “Pantech and the service providers have come to a tentative agreement regarding the retail price for the model.” Starting on April 27, from which SK Telecom and LG U+ will be under suspension, KT, in turn, would take over offering the Vega Secret Up at the same price.
According to the local media, KT plans to bring down the retail prices of Samsung Galaxy S4 Mini, LG Optimus GK, iPhone 5, and others by 50 percent at the most when it breaks free from suspension.
Written by Robin Koo (linguistkoo@koreabizwire.com)
Technology (Follow us @Technews_Korea)
