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Digital Daily

Has SK Telecom begun stock clearance sale of the Samsung Galaxy Gear smartwatch? SK recently launched sales of packages bundling the Galaxy Gear and smartphones. It is unusual for a mobile carrier, not a mobile device manufacturer, to make a bundle package and sell it.  

SK Telecom announced on Nov. 9 that it would sell Galaxy Gear bundle packages at its stores across the country. In addition to the smartwatch, the bundles include the Galaxy Note 3 or the Galaxy Round. Prices of the bundles vary from store to store because the packages were not bundled by the manufacturer of the devices, Samsung Electronics, but by SK Telecom.    

An SK official said that the bundle packages were offered by SK Telecom, not by Samsung, and the discount rates would differ depending on the size of the stores and the amount of subsidy they provide to consumers.

There would be a discount of about 100,000-150,000 won from the total factory prices of the devices in the bundle, in addition to the subsidy normally offered to consumers who buy mobile communication devices. The factory prices of the Galaxy 3 (32GB), Galaxy Round (32GB) and Galaxy Gear are 1.067 million won, 1.089 million won and 396,000 won, respectively.

SK Telecom also plans to hold a variety of giveaway events for the consumers of the bundle packages from Nov. 22.

The Galaxy Gear attracted much attention when it was released but its sales record is not so impressive in the domestic market because of high price and a shortage of compatible devices. For this reason, mobile carriers wanted to sell the Galaxy Gear in a bundle package from the beginning but Samsung Electronics did not allow.

An official of Samsung Electronics said the company has no plan to make a bundle package including the Galaxy Gear yet. He refused to make public the domestic sales volume of the smartwatch but said Samsung had supplied over 80,000 sets globally until mid-November.

SK Telecom’s bundle packages seem aimed at clearing the Galaxy Gear in stock. Since the Galaxy Gear is not a communication device, it is impossible to provide subsidy to consumers. But by bundling it with a smartphone, they can provide subsidy to customers. Therefore, the bundling package seems an expedient way of marketing. For mobile carriers, it would be better to sell products at a certain amount of loss than to be burdened with a backlog of unsold inventory. However, it wouldn’t be easy for Samsung to sell more Galaxy Gears in the future because it is not probable for mobile carriers to be willing to take the same risk.

Responses of KT and LG Uplus are worth watching as they also maintain a considerable amount of Galaxy Gears in stock.