[Asia Economy Reporter Oh Su-yeon] With the iPhone 14 set to launch on the 7th of next month, the possibility of wholesale provision of 5G mid-tier plans is opening up, bringing a fresh breeze to the budget phone market.
According to the telecommunications industry on the 26th, Apple plans to start pre-orders for the iPhone 14 series on the 30th and officially launch it on October 7th. Traditionally, the release period of flagship smartphones sees active number portability. In the case of the iPhone, the carrier subsidies are low compared to the high device price, making unlocked models popular. This is why budget phone subscribers surge significantly every time a new iPhone is released.
According to the Ministry of Science and ICT's "Wireless Communication Service Subscription Status," when the iPhone 13 was released in October last year, the number of budget phone LTE line subscribers increased by 103,520 compared to the previous month. In November, the number increased by 179,189, pushing budget phone subscribers past 10 million. This contrasts with an increase of 61,182 in September, the previous month.
In particular, despite the price increase, the early success of the Pro models is expected to fuel this trend. Market research firm Counterpoint Research predicts that due to the popularity of the Pro models, the average selling price (ASP) of the iPhone, which was $873 last year, will reach $892 in the third quarter of this year after the iPhone 14 launch, and rise to $944 in the fourth quarter.
The iPhone 14 Pro and Pro Max have removed the M-shaped notch on the front camera and are equipped with the new Apple application processor (AP) A16 Bionic. The basic iPhone 14 and Plus models have no significant performance difference compared to the previous iPhone 13. Considering the preference of domestic consumers who prioritize performance, it is expected that purchases will focus on the Pro and Pro Max models domestically, as overseas.
The 5G mid-tier plans are also expected to serve as a catalyst for expanding budget phone subscribers. The Ministry of Science and ICT is continuing negotiations with SK Telecom regarding the wholesale provision of 5G mid-tier plans. A Ministry official said, "SK Telecom has agreed to provide wholesale, and the timing is under discussion." The industry expects that related plans will be launched alongside the Ministry's budget phone activation policy announcement, anticipated around November.
As of the end of July, among the total 11,848,207 budget phone subscribers, only 96,783 are 5G users. 89.4% of subscribers (10,590,888) are using LTE. Therefore, even if the budget phone industry introduces 5G mid-tier plans, the majority of subscribers are expected to remain in the LTE market. However, in the long term, budget phone subscribers, like those of the three major carriers, need to transition to 5G, and launching affordable 5G mid-tier plans proactively can prevent existing subscriber churn. A budget phone industry official said, "Although LTE plans are the mainstay, in the long run, it is positive that budget phones also move from LTE to 5G."
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