November 07, 2012 10:59
Google will not release its Nexus 4 smartphone and Nexus 10 tablet PC in Korea, although they were developed in conjunctions with two Korean electronics giants -- the smartphone with LG Electronics and the tablet PC with Samsung Electronics.
The international press has touted them as the "best-ever" Android phone and the only tablet PC boasting better resolution than the iPad. They are also competitively priced, costing half of rival products around the world. So why can they not be sold in Korea?
◆ Nexus 4
Google took part in the development of the products, but Samsung and LG are in charge of production. The search giant apparently considered releasing them in Korea, but eventually decided not to because the Korean phone makers and mobile providers refused.
"We contacted mobile providers and discussed marketing the smartphone here, but the plans fell through," an LG Electronics staffer said. "Korean customers prefer LTE, but the Nexus only has 3G, so we didn't think it would sell."
Mobile providers have spent astronomical amounts of money to build nationwide LTE networks and are busy recruiting new customers to recoup their investment. LTE services fetch W10,000 to W30,000 (US$1=W1,091) more per customer in monthly fees than 3G services.
LG is also less than enthusiastic about releasing the Nexus 4 here because it is cheaper than the company's flagship Optimus G. The Nexus 4 costs around US$299~$399, but the Optimus G, which has similar specs, W999,000.
The more expensive the smartphone, the fatter the margins. "The Nexus 4 was designed to be sold overseas, and we took into consideration the difficulty in installing programs that are designed for consumers here," said an LG staffer.
Some consumers are looking to overseas websites to buy the Nexus 4, even at a hefty markup.
◆ Nexus 10
The Nexus 10 costs just $399~$499, but Samsung already has a diverse line-up of tablet PCs that are more expensive, so it was equally against selling the gadget here.
Samsung's Galaxy Tab 10.1 and Galaxy Note 10.1 tablet PCs have a 10-inch screen like the Nexus. Another factor that went into play was the fact that the domestic market for tablet PCs is small.
"When you factor in VAT on top of the overseas price tag for the Nexus 10, they end up costing about the same as our existing 10-inch tablet PCs," a Samsung staffer claimed.
But while Korean smart device makers and mobile providers are busy trying to foist high-end models on consumers, Chinese manufacturers are tapping into niche markets for cheap-and-cheerful products.
Chinese mobile phone maker ZTE on Tuesday unveiled its 3G Z Phone in Korea, which costs just W239,000. The first 100 customers got it for just W199,000.
ZTE is selling its smartphones in Korea at large discount stores, which Samsung and LG have avoided due to concerns about making their products look cheap. ZTE plans to roll out an LTE smartphone in Korea next year.
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