South Korea's cool reception to Samsung's latest 5G smartphone, the Galaxy 20, has turned the spotlight once again on how much value customers see in the next-gen tech.
In a report by Reuters, COVID-19 was among the exhibits in explaining why South Koreans are reluctant to shell out a hefty 1,595,000 Korean won (US$1,290) on the Galaxy 20, which was launched in February. According to a Reuters source, Galaxy 20 sales were down 30% in South Korea compared with the initial reception to Samsung's previous 5G-ready S10 models.
No doubt the coronavirus is forcing South Koreans to think twice about spending the 5G cash, but there are other factors at play, not least the end of heavy handset subsidies.
Net subscriber additions to the next-gen tech, which the Reuters report points out, have been falling since last August, barely a few months after 5G arrived on the scene. Concerns over cost and dodgy network connections are proving something of a stumbling block for more widespread adoption.
These are worrying times for South Korea's operators. At a time when operating margins are already being squeezed by rising 5G costs, the government appears to have badgered them to invest even more on 5G infrastructure – particularly in subways, railroads, department stores and universities – to boost coverage.
More signs that customer interest in 5G is waning – or that they are simply not willing or able to splurge on pricey handsets for what they might see as a questionable upside – will hardly be welcome.
SK Telecom, the country's 5G market leader with around 2.2 million subs, has the aim of racking up between 6 and 7 million by the end of this year. This looks a highly ambitious target given that all three of the country's mobile operators – factoring in KT Corp and LG Uplus – added just 290,000 5G users in January. That was the lowest total since they began service last April, and down from a peak of 870,000 adds in August and 670,000 in September.
South Korea's 5G travails come at a time when China looks set to enjoy a 5G spurt, having apparently come through the worst of the coronavirus outbreak. Xiaomi, China's number two smartphone manufacturer behind Huawei, recently reported that smartphone shipments in China "rebounded quickly" at the tail end of March.
— Ken Wieland, contributing editor, special to Light Reading