Samsung doubles Galaxy S20 subsidies ahead of iPhone SE launch

Samsung quite literally doubled down on Galaxy S20 subsidies in bid to boost sales of its newest high-end smartphones. The company's latest move was directed at its domestic market as the three largest carriers in South Korea all began further incentivizing Galaxy S20 purchases in recent weeks. Consequently, the value of subsidies that SK Telecom, KT, and LG U+ are offering to prospective Galaxy S20 buyers is now going up to 500,000 won, or just under $410.

This is in line with how the company has been handling the Galaxy S20's weak debut in other markets. For example, its U.S. arm recently launched an unprecedentedly aggressive buyback program, offering up to 50% off on select Galaxy S20 models.

Galaxy S20 sales almost 40% below the Galaxy S10

Industry watchers also believe that this is Samsung's way of pre-empting the launch of Apple's new budget iPhone SE in South Korea. The new iPhone offers powerful specs in a smaller footprint and at a more aggressive price point, which is why it's expected perform well in the market.

The newest subsidies were reportedly passed on directly from Samsung, meaning telecom operators in South Korea are still selling the Galaxy S20 devices at a markup similar to that from two months ago. None of that is to say their bottom lines aren't getting erased by the ongoing coronavirus pandemic, it's just that Samsung's sense of urgency is greater. Sources estimate the sales of the Galaxy S20 line are between 20% and 40% lower compared to the Galaxy S10 range.

This concerning state of affairs also puts Samsung's near-term 5G plans in question. The Galaxy S20 series was meant to mark the start of its mainstream adoption, not to mention Samsung's plans to launch a number of cheaper 5G smartphones this month. It remains to be seen what kind of results that strategy will achieve now that buying smartphones isn't exactly near the top of most people's list of priorities.

Dominik Bosnjak

Phone Galaxy S20 South Korea