Fun with Data – Samsung Smartphones in Korea
Samsung (005930.KS) has indicated that it has sold one million units of its Galaxy S21 smartphone series in its home country of South Korea as of today. The company reached this sales number in 57 days, about a month earlier than the previous Galaxy S20 (2020) series, although the Galaxy S10 (released in March 2019) sold 1m units in a record 47 days. As the sales share leader in South Korea by a large margin (72% in 3Q ’20), Samsung’s success in its home country is based on its ability to create something new each year as the penetration rate for smartphones in South Korea is ~76.5%, just a bit below France (77.6%), Germany (77.9%), UK (78.9%) and the US (81.6%), which tops out the list, and last year’s model, the S20, was a bit of a disappointment.
We do note that Samsung has been offering a number of promotions including coupons for Samsung wearables worth ~$88 and a generous trade-in program as we deliniated in our 3/25/21 note and continues its “Galaxy-to-Go” program that allows potential buyers to rent a Galaxy S21 series phone for three days to try it out. That said, we expect the real reason that the Galaxy S21 series is doing better than last year’s model is due to pricing, which is shown below. All three versions are $200 less than last year’s 5G models and have similar or better features, thus coupled with the discounts and incentives, represent a reasonable entry point for a new customer or replacement. This indicates that features have become less important than price, a trend that was beginning to appear when COVID-19 became a serious issue, and now has taken center stage. While Samsung does still compete with South Korean smartphone producer LG Electronics, the verdict remains out as to whether LGE will continue to produce smartphones given its years of losses in that segment.
We do note that Samsung has been offering a number of promotions including coupons for Samsung wearables worth ~$88 and a generous trade-in program as we deliniated in our 3/25/21 note and continues its “Galaxy-to-Go” program that allows potential buyers to rent a Galaxy S21 series phone for three days to try it out. That said, we expect the real reason that the Galaxy S21 series is doing better than last year’s model is due to pricing, which is shown below. All three versions are $200 less than last year’s 5G models and have similar or better features, thus coupled with the discounts and incentives, represent a reasonable entry point for a new customer or replacement. This indicates that features have become less important than price, a trend that was beginning to appear when COVID-19 became a serious issue, and now has taken center stage. While Samsung does still compete with South Korean smartphone producer LG Electronics, the verdict remains out as to whether LGE will continue to produce smartphones given its years of losses in that segment.
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