SEOUL, Oct. 22 (Korea Bizwire) – With the South Korean launch of the iPhone 8 looming, much attention is being paid to how Apple’s latest phone will affect the domestic mobile communication market in Korea. Some anticipate that cutthroat competition will come about surrounding the abolishment of upper limits on subsidies and the newly instituted 25 percent discount charges.
According to an industry official on October 20, the iPhone 8 will make its debut in the domestic market through the three major mobile carriers (SK, KT, and LG) on November 3.
Some major mobile stores are already attracting customers by means of registering buyers and their contact info on waiting lists.
It is commonly estimated in the industry that all iPhone 8 buyers will register for discount charges.
Traditionally, only 90 percent of iPhone users have been offered discount charges due to the lack of official subsidies for the phone. With the discount rate raised from 20 percent to 25 percent on September 15, more iPhone 8 users will apply for the discount benefit.
As the upper limits on subsidies were repealed from the beginning of this month, mobile carriers are less likely to offer high subsidies for the iPhone, which has a loyal customer base, said an industry insider.
This estimation is also backed by the fact that the mobile carriers, which are concerned with reduced sales figures stemming from the elevated discount charges, do not have much to pour into subsidies.
“As Apple does not pay subsidies, it is difficult for telecom companies to bear all the burden,” said an official at one of the mobile carriers.
Rather, it is more likely that subsidies set for mobile phones from Samsung and LG, Apple’s main competitors, increase through the channels of mobile communication companies because they would want to prevent customer defections and are likely to jump into subsidy competition.
This is why a subsidy crisis starting from the mobile phone manufacturers is expected to ensue after the launch of the iPhone 8 in the domestic market.
However, customer response to Apple’s new phone will remain a key factor in determining the market outcome.
Currently, Apple is looking into issues with expanding iPhone 8 batteries that have been reported on several occasions.
If Apple can’t come up with a clear explanation and a solution, it is expected that concern among domestic consumers will grow, potentially putting a damper on the iPhone 8 launch.