iPhone 7 debut in South Korea hurts Samsung

Apple Inc’s iPhone 7 went on sale in South Korea yesterday, seeking to fill a void left by archrival Samsung Electronics Co on its home turf following a damaging recall fiasco over the Note 7 smartphone.

The South Korean electronics giant discontinued the Note 7 — one of its key iPhone challengers — on Tuesday last week following reports that replacements for combustible models were also catching fire.

The decision is set to cost Samsung billions of US dollars in lost profits and there are already signs that Apple is reaping some of the benefits.

Samsung shares fell nearly 2 percent yesterday as iPhone 7 hit stores across the nation.

An official at mobile carrier Korea Telecom said the first batch of 50,000 iPhone 7s it put up for preorder a week ago sold out in 15 minutes.

“I would attribute part of that to the Note 7 effect,” said the official, who declined to be identified because he was not authorized to talk to the media.

Customer defection is one of Samsung’s biggest concerns, especially as the Note 7 was specifically aimed at taking on the iPhone in the premium handset market.

In the hope of retaining customer loyalty, Samsung had offered Note 7 users a 70,000 won (US$60) phone bill credit if they swapped their faulty phones for another Samsung handset.

The half-dozen customers buying the new iPhone at a Korea Telecom store in central Seoul yesterday were all long-time Apple users who had preordered their handsets.

Office worker Lee Kyung-hee, 34, said she had moved fast when the preorder service opened, fearing a surge of interest from unhappy Note 7 owners.

“I set an alarm and was very quick,” Lee said.

In South Korea, retail prices for the iPhone 7 and 7 Plus start from 869,000 won and 1.02 million won respectively for the basic 32GB models.