LG Electronics Sells Off Inventory with Tears Before Ending Smartphone Business in July
Public Subsidies Increase
KT Offers 'LG Velvet' Actual Purchase Price in 90,000 Won Range
'LG's Last Phone' LG Velvet 2 Pro Causes Server Crash Due to Employee Mall Popularity
On the 1st, LG Electronics is hastening the final arrangements ahead of the end of its smartphone business at the end of July. The photo shows a special discount sale sign for the 'LG Velvet' set up in front of an SK Telecom agency in the Seoul area. Photo by Cha Min-young
[Asia Economy Reporter Cha Min-young] ‘Goodbye LG, the truly final drastic discount’ LG Electronics is rushing to wrap up as it approaches the end of its smartphone business at the end of July. While most existing products have become clearance stock, the ‘LG Velvet 2 Pro,’ famous as the last LG phone, has paradoxically seen a surge in orders through the employee-only mall.
According to industry sources on the 1st, KT raised the official subsidy for the 'LG Velvet,' priced at 899,800 KRW, from a maximum of 600,000 KRW to 700,000 KRW. This is the highest level among the three major mobile carriers. Currently, the official subsidy for the highest-priced plans from SK Telecom and LG Uplus is set at 500,000 KRW. Including the additional subsidy, which is up to 15% of the official subsidy, the actual purchase price through KT drops to the 90,000 KRW range. On the same day, KT also increased the official subsidy for LG Electronics’ budget 5G phone ‘LG Q92,’ which is already part of the ‘0 KRW phone’ lineup, for some plans.
Although LG Electronics urgently needs to clear inventory, the LG Velvet 2 Pro, which became the last LG smartphone, faced a shortage instead. LG Electronics planned to sell the LG Velvet 2 Pro through its employee-only mall ‘LG Life Care’ starting at 9 a.m. the previous day, but the server crashed, and the sales schedule was temporarily postponed. At one point, simultaneous waiting users reached 15,000, exceeding the site’s capacity. LG Electronics announced, “The LG Velvet 2 Pro, scheduled for sale today, could not proceed normally due to system overload,” and added, “We will provide further notice regarding future sales plans.”
Due to demand exceeding initial expectations, LG Electronics plans to change the LG Velvet 2 Pro sales method from first-come, first-served to a lottery system. An LG Electronics official said, “We are considering switching to a lottery system due to high demand,” and added, “We will accept orders for a certain period and then select winners by lottery, but the exact schedule has not been decided yet.”
The LG Velvet 2 Pro, also called ‘LG Rainbow,’ was sold exclusively to LG Electronics group employees. With a limited quantity of 3,000 units, an affordable price in the 190,000 KRW range, and a limited edition premium, it attracted consumer interest. It was also stipulated that only immediate family members could transfer ownership and resale was prohibited. This exclusivity was especially highlighted among LG phone enthusiasts who have affection for LG Electronics smartphones.
LG Electronics ended smartphone production without any separate event as of the 31st of last month. It plans to exit the entire mobile business by July. LG Electronics held a 13% market share in the domestic smartphone market as of the end of last year, but skepticism about the smartphone business arose as cumulative operating losses exceeded 5 trillion KRW. However, it has committed to supporting mobile operating system (OS) upgrades for up to three years. Product after-sales service (AS) will be available for at least four years.
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