When technology advances and related gadgets become widely available, what tends to happen is a steady decrease in hardware prices. Mainstream smartphones are getting pricier each year, putting a strain on limited household budgets.
Of course, Korean consumers can get popular smartphones from Samsung Electronics and Apple at a discount by signing up for data plans with mobile carriers. But even with such deals, the prices for the latest Galaxy and iPhone series are easily above 1 million won ($840).
We could blame Apple for the overall hike in smartphone prices, as the US-based iPhone maker runs a premium brand strategy. But it’s not limited to Apple in recent years. Samsung is rolling out one pricey phone after another, exciting early adopters with deep pockets but disappointing those who want more affordable models.
One interesting development is that Samsung is taking steps to boost its premium brand image a step further. At the center of the tech giant’s ambitious strategy is the Galaxy Z Fold2, whose price is set at 2,398,000 won, or about $2,000. A unique form factor and a myriad of innovative features adopted in the Z Fold2 showcases the company’s technological edge.
For many smartphone users in Korea, it’s extremely expensive but still attractive enough to consider breaking their usual buying pattern. But taking action is easier said than done. A friend of mine had seriously weighed the option of buying the foldable phone, but decided not to do so, largely because of the price.
And the regular Z Fold2 is not the end of the story. The Galaxy Z Fold2 Thom Browne Edition is priced at a whopping 3,960,000 won, or about $3,300, but Samsung had to hold a two-day online draw to select those who would get the privilege of purchasing the model, in a move aimed at addressing the overheated competition. It is speculated that some 1,000 units out of 5,000 units to be released globally are to be sold in Korea.
On Wednesday, more than 230,000 people here entered a draw to buy the limited edition of the Z Fold2. It has been suggested that those who are lucky enough to purchase the limited edition could reap a handsome profit by reselling it.
This red-hot popularity of the super expensive phone comes as the overall economy is, if anything, in poor condition. The COVID-19 pandemic is hurting the Korean economy and many people who run their own businesses are struggling to stay afloat as outdoor activities are restricted and a growing number of people work from home. The Korean government is undertaking a number of new policies and initiatives to bolster the battered economy, but the road ahead appears rocky.
Given Korea’s entire population of 51 million, it is hardly a surprise that as many as 230,000 people can afford to fork over more than $3,000 to buy a new smartphone, whose usage cycle averages two to three years considering the rapid cycle of new handset debuts.
When it comes to the monetary value of a luxury brand or a cutting-edge technology, it’s the market that determines the actual price. If there is real demand for expensive yet fancy functionalities on smartphones, the steep price tag can be justified.
But hardware makers such as Samsung and Apple should pay more attention to the often-ignored consumer group craving midrange models -- smartphones equipped with most of the mainstream features, whose prices are somewhere between the high-end and low-end.
State-of-the art technology, demonstrated by the Z Fold2, is welcome as far as it is not for everyone, but the steadily increasing cost to buy mainstream phones is not so welcome for many consumers.
By Yang Sung-jin (firstname.lastname@example.org)
Yang Sung-jin is the multimedia editor of The Korea Herald. -- Ed.