Samsung woes spill over to S. Korean telecom trade
SOUTH Korea's telecom industry is bracing for sizeable losses after Samsung suspended sales of its Galaxy Note7 smartphone.
On Tuesday, it said it would ask all carrier and retail partners globally to stop sales and exchanges of the device to prioritise consumer safety.
The nation's three network carriers - SK Telecom, KT and LG Uplus - on Tuesday said they had stopped sales.
The refund and exchange procedures are expected to be complicated, due to the sheer scale of the affected devices and diverse domestic sales channels involved.
Considering that Samsung accounts for around 70 per cent of the local market, domestic carriers are likely to see a major dip in sales in the latter half of this year and beyond.
"We experienced more than a 30 per cent year-on-year drop in sales in August and September, largely due to the recall," a retailer said.
"It's going to be a difficult period for telecom firms and phone retailers... as well as the greater Korean economy."
Rivals Apple and LG are expected to enjoy heightened interest from customers.
LG recently began selling the V20 smartphone. At 899,800 won (S$1,107), it is slightly cheaper than the Note7.
Apple is slated to release the iPhone 7 and iPhone 7 Plus in South Korea on Oct 21. Expectations are high that customers will choose to buy a new iPhone in the absence of Samsung's latest smartphone.
"The market reception of the LG V20 has been better than usual, and I think some customers who now own Samsung devices may switch to an LG model," said a salesman.
Firms which supply components and parts to Samsung are likely to suffer too.
Small- and mid-sized firms - including Amotech, Hansol Technics and Kolen - saw their share prices drop nearly 30 per cent in the past month.
THE KOREA HERALD/
ASIA NEWS NETWORK