Preorders for iPhone 4S start amid price dispute

Korea’s two leading mobile carriers SK Telecom Co. and KT Corp. on Friday began receiving preorders for Apple Inc.’s iPhone 4S, which is slated to hit the local market on Nov. 11, amid a brewing dispute over its higher price here than in other countries.

The battle for iPhone 4S is expected to be tougher than ever as KT, the company which began to provide iPhone in the Korean market as the sole provider in late 2009, is desperately trying to retain its existing iPhone user base against the marketing onslaught from its rival SK Telecom, which later obtained the right to sell Apple’s flagship smartphone.

The two carriers also revealed that their prices for iPhone 4S are higher than in the U.S. and Japan. For KT users who sign up for a 54,000 won ($48) monthly plan on a two-year contract, iPhone 4S is priced at 212,000 won for 16GB, 344,000 won for 32GB and 476,000 won for 64GB. SK Telecom’s offerings are slightly pricier: 230,800 won for 16GB, 362,800 won for 32GB and 494,800 won for 64GB.

Some of the price plans by KT and SK Telecom are higher than those in the U.S. and Japan. Verizon users in the U.S. who sign up for a similar plan can get the 64GB iPhone 4S for $399, but in Korea users have to pay $422-438. For Japanese users signing up for Softbank and KDDI, the same 64GB iPhone is priced at $256 with a similar monthly plan.

With the prices set to spark anger among Korean users, KT and SK Telecom announced more incentives to lure away existing iPhone 3G and 3GS users whose two-year contracts are set to expire in the next month or so.

KT is proposing a discount of up to 210,000 won for the iPhone 4S when existing iPhone users return their handsets and sign up for a new two-year contract. KT’s promotional event is limited to its existing customers, a strategy aimed at keeping its subscribers from its rival SK Telecom.

SK Telecom, meanwhile, does not put any limit on the current carrier in offering a discount of up to 340,000 won in a bid to attract iPhone users from KT.

As iPhone’s battery life tends to drop rapidly after one or two years and the newly distributed iPhone operating system iOS5 requires higher computing power, many of the existing iPhone 3G and 3GS users are expected to migrate to the last iPhone created by the company before Apple founder Steve Jobs died on Oct. 5.

When Apple unveiled the iPhone 4S in October, Korea was excluded from the list of countries where the new model would be launched, disappointing Korean users. But optimism was renewed as Apple applied for a radio certificate from a Korean government agency late last month and obtained approval on Nov. 1.

Since the launch of the iPhone in Korea in November 2009, the sales surpassed 6 million units as of June this year, forcing Korean manufacturers such as Samsung Electronics to roll out new smartphones to defend its market share.

Government data shows that the number of smartphone subscribers in Korea topped the 20 million mark last month.

By Yang Sung-jin (insight@heraldcorp.com)