South Korea’s telecommunication industry is skeptical towards whether or not Apple’s iPhone SE can succeed in South Korean market because many Smartphone users are already have become familiar with phablet phones with 5-inch or bigger screens. There are also criticisms that there are not any rooms for products that cost about 500,000 KRW ($424) while inexpensive phones that cost between 200,000 KRW and 300,000 KRW ($170 and $255) are becoming more popular. On the other hand, some predict that iPhone SE will be able to succeed if it can attract current iPhone 5 and iPhone 5S users that are estimated to be more than 1 million people.
◇Many skeptic views towards iPhone SE
2011 was the first year when 5.29-inch Galaxy Note was released in South Korea. Variety of phablet phones with 5-inch or bigger screens were released for 2 to 3 years after that and phones with large screens have become a norm. Recently even Smartphones that do not use stylus pens like Note series have screens that are between 5.1 and 5.3 inches. A reason why Apple let go of its 4-inch strategy in 2014 and introduced iPhone 6 (4.7-inch) and iPhone 6 Plus (5.5-inch) is because it wanted to join this trend.
In one and a half years, Apple has come back with 4-inch product again. Although its performance is higher and has lower price, majority of telecommunication industries believe that it will not be easy for people who use products with large screens to go back to products with small screens. Although it is easy to move from a small screen to a big screen, there won’t be many consumers who elects for other way around.
Fact that iPhone SE has an ambiguous price at about 500,000 KRW (based on 16GB) is another reason why telecommunication businesses are skeptical. After mobile device distribution improvement act was enforced in South Korea’s Smartphone markets, inexpensive phones that cost between 200,000 KRW and 300,000 KRW are becoming more popular. Market is now divided into premium products that cost between 700,000 KRW and 800,000 KRW ($594 and $679) and inexpensive products and there isn’t much room for products that cost 500,000 KRW.
◇Will Apple manias help with success of iPhone SE?
It is estimated that about 3 million to 4 million South Koreans use iPhones. Although this number dropped to 2.5 million at one time, it has started to rise again since iPhone 6, which recorded unprecedented record, came out. About 1 million South Koreans currently use 4-inch iPhone 5s and it is estimated that up to 1.5 million South Koreans use about 4-inch product if number of people who use iPhone 5S, which is also a 4-inch product, is added. There aren’t people waiting in a line for many days to acquire Apple’s new product and South Korean distributors do not have to look into their inventories like in the past anymore. However there are still many people who absolutely love Apple products.
“Current 1 million South Korean iPhone 5 users can buy a product that has better performance and cheaper price than iPhone 5.” said a representative for a telecommunication industry. “Because they are already using 4-inch products, they won’t feel much inconvenience when they switch their phones with iPhone SE.”
It is not easy for a particular inexpensive phone to be sold more than 1 million copies in South Korea’s Smartphone markets and there aren’t any guarantees that all current iPhone 5 users will switch their phones with iPhone SE. However industries predict that there are definitely considerable amount of potential demands for iPhone SE.
◇Mobile telecommunication businesses to pay careful attention to current situations
3 South Korean mobile telecommunication businesses are paying careful attention to current situations. As there clearly area people who still love Apple products, it is not easy for them to act carelessly towards iPhone SE. However if they focus too much on marketing on iPhone SE, then there can be some burden on their inventories. It seems that people who are in charge of each mobile telecommunication business also cannot confirm on whether or not iPhone SE will succeed in South Korea.
“Apart from how much Apple has supplied for preorder, responses from customers during preorder period were more positive than expected.” said a representative for a mobile telecommunication business. “Because marketing departments’ strategies differ every time, it is not easy to make predictions at the moment.”
Because it is not easy to make predictions towards iPhone SE, discussion to decide on the amount of funding is taking a long time. While it is easy to increase fixed funding, it is difficult to bring it back down. A reason why funding was set so low for certain premium phones during early part of mobile device distribution improvement act was because mobile telecommunication businesses wanted to increase funding at a slow pace while watching market situations.
However recently mobile telecommunication businesses has been giving a lot of funding for products that have high chance of succeeding even during early part of those products’ sales because it is possible for them to fall behind of their competitors during early part of competition. Due to this reason, it is predicted that level of funding from 3 mobile telecommunication businesses that will be announced on the 10th will have their thoughts on how well iPhone SE is going to do in South Korean markets.
Staff Reporter An, Hochun | hcan@etnews.com