[Report] "If You Work Today, You Get 70,000 Won"... Galaxy 22 Turned into a 'Chabiphone'

If You Receive Official Subsidy, 420,000 Won... -70,000 Won in Seongji
Clearing Inventory Before Galaxy S23 Launch... "Buying Now Makes You a Smart Consumer"

On the 8th, the collective mobile phone market at Sindorim Techno Mart, Seoul.

[Asia Economy Reporter Oh Su-yeon] One month before the launch of the Galaxy S23, illegal subsidies for the previous model S22 have significantly increased, mainly through some distribution channels. Although there are slight differences depending on the carrier, plan, and whether it is a device upgrade or number portability, it has become what is called a 'chabi phone' (a slang term referring to a device sold with extra money added under the pretext of transportation costs).

On the 8th, I visited the mobile phone collective market at Techno Mart in Sindorim, Seoul. According to statistics from the Korea Telecommunications Operators Association (KTOA), number portability decreased by 26% year-on-year as of December last year. Although the smartphone market has frozen, perhaps due to the weekend, people were seen asking about phone prices here and there. They were filling out various documents and taking out their IDs to proceed with activation. Families and friends also visited together to purchase multiple devices at once.

Entering the first store I saw, I told the staff my carrier and that I was looking for a Galaxy S22. The staff took out a calculator. "Basically, it's zero won, but there can be additional payback. I'll give you the maximum," he said, then asked, "How much chabi did you come expecting?"

Referring to the online 'holy site' price list I had checked beforehand (a slang term for stores that provide subsidies exceeding the official support to avoid the Device Price Stabilization Act), I entered '5' into the calculator. This means that if you purchase the Galaxy S22 today, the seller will pay the customer 50,000 won by the end of next month.

The staff tapped the calculator with one hand while holding the smartphone with the other, then entered '6' and showed it. He said, "Normally, you have to use a plan costing around 110,000 won per month to get this much, but if you apply today, I can match this price even with a plan in the 90,000 won range," adding, "You only need to use one additional service this month." The more expensive the plan, the higher the 'chabi'.

Even if you use the most expensive monthly plans of the three major carriers, costing 120,000 to 130,000 won, the maximum official subsidy for the Galaxy S22 is only 500,000 won. Including the additional subsidy of up to 15% of the official subsidy, you get a discount of 575,000 won. If you purchase the Galaxy S22, priced at 999,900 won, at the lowest price allowed under the Device Price Stabilization Act, it costs 424,900 won. However, in reality, it was being sold at -60,000 won, which is 484,900 won cheaper than the price complying with the law.

The retail prices for the Galaxy S22 Plus and Galaxy S22 Ultra are 1,199,000 won and 1,452,000 won, respectively, which are 199,100 won and 452,100 won more expensive than the base model. Illegal subsidies are provided at the same level as the base model. On that day, purchasing at the store meant the S22 Plus could be bought for only 140,000 won, and the S22 Ultra for 390,000 won.

At the second store I visited, the 'chabi' increased by 10,000 won. The staff said, "If you do it now, I'll give you this much. But please maintain the plan for six months," showing a calculator displaying '7'. If you use a plan costing around 110,000 won, you can get back more than 100,000 won.

The Galaxy Z Flip4, released in August last year, dropped to as low as 260,000 won. The maximum official subsidy for the Flip4 from the three major carriers ranges from 520,000 to 650,000 won. If complying with the Device Price Stabilization Act, you can receive an official subsidy of 650,000 won and an additional subsidy of 97,500 won, totaling 605,500 won.

When I hesitated between the S22 and Flip4, the staff said, "It's better to buy the Galaxy S22. Today's (subsidy) is best for the S22." He recommended, "If you want to buy now, it's either the S22 or the Flip4, but people who originally used bar-type smartphones will find the bar type more convenient."

While continuing to look around the stores, a distributor owner stopped me, saying, "I'll give you a good deal." The prices were similar to the previous stores.

When I mentioned the upcoming Galaxy S23, the owner emphasized that now is the last chance before the launch. He explained that if you miss this period when subsidies are temporarily expanded to clear out stock of the previous model, it will be difficult to buy cheaply for a while.

He said, "The Galaxy S23 will come out with official subsidies in the 200,000 to 300,000 won range, so smart consumers buy these products before that. Right now, high-performance devices are free, but when the S23 comes out, subsidies will be focused on the S23, so it won't be free."