Wednesday, April 20, 2011

Apple's iPhone is selling well but, as with any good business, it comes with a headache.

With SK Telecom now the second vendor of the iPhone, that headache, at least from the standpoint of consumers, is easing.

They are the winners.

"Customers are gaining a greater edge irrespective of whether or not to change and renew their contracts with SK Telecom and KT are selling the same products. After-sales policy might be the top concern," said a senior SK executive, asking not to be identified.

"Carriers used to have all the bargaining power. For them, consumers were out of focus. But Apple has changed everything. Carriers are uneasy but they have no option but to spend more for customer satisfaction," added the executive.

South Korea, dominated by Samsung and LG Electronics, has been regarded as a tomb for foreign handset makers as they found difficulties in spending a lot on marketing and strengthening after-sales policies for just the Korean market.

"That's the story of the so-called 'feature phone period.' Amid the smartphone era, more people are ready to endure poor after-sales services if the product is better," said a senior KT executive on the condition of anonymity because he isn’t authorized to speak to the media.

SK Telecom and KT are feeling the pinch because the word "customer" is still the most critical factor and should not be underestimated considering carriers' heavy dependence on them for profitability.

"Samsung's Galaxy-branded smartphones still have a long way to go. We need to put more focus on consumers using our new iPhones for the time being," said another SK executive, without elaborating further.

Significant changes

KT, which had been reluctant to improve after-sales services for the iPhone despite numerous complaints, has recently begun its "iPhone care center" in downtown Seoul.

By the end of May KT will expand the number of centers by 10, it said in a release.

A company spokeswoman Kim Yoon-jeong said the center provides face-to-face consultation with an engineer to fix technical flaws.

"Customers can grade service levels because the names of engineers at the centers will be given," said Kim.

In addition, KT has been providing the service in the evening for those who are at work during the day.

Foreigners and non-Koreans can also receive interpretation services without charge to discuss iPhone problems.

"Even foreigners will be given the rights to use our iPhone rental services during the repair period with low rental fees," said the spokeswoman.

Local stock analysts are saying that KT’s stock is most-undervalued among other big telecom firms and expect the firm’s shares to see upward momentum with the arrival of Apple’s updated tablet, the iPad 2.

Officials at the Korea Communications Commission (KCC), the nation’s top telecom regulator, said KT has received frequency authorization from the regulator for its Wi-Fi and 3G iPad 2 models.

``KT is in the final stage with Apple to introduce the iPad 2 within this month because we want to enjoy a first-mover advantage ahead of SK Telecom amid improving after-sales services,’’ said another high-ranking KT executive.

Kim of KT declined to reveal any further information on the timing of the iPad 2’s arrival, citing the sensitivity of the issue.

SK Telecom is also spending more to improve the level of customer satisfaction to its existing and new clients.

SK Telecom doesn’t run service centers exclusively for iPhone customers because it just begun selling the Apple handset here.

But the nation’s top carrier said its 32 service centers across the country are offering intensive after-sales services to its customers using foreign mobiles from Apple, HTC of Taiwan, Sony-Ericsson and Research In Motion.

``SK Telecom is running facilities such as book-cafe and computer zones within each service center. Visitors can learn more about smartphones via our educated phone advisers,’’ said SK Telecom spokeswoman Kim Ji-won.

Kim said its service centers had settled a combined 720,000 cases throughout last year and added it will expand and open centers to meet the rising consumer demand for qualified after-sales services.

But SK Telecom is still being asked to say whether it plans to release the upgraded iPad amid tight supply.

SK Telecom’s Kim said nothing has been decided yet about the arrival of iPad 2, though sources were saying SK recently opened talks with Apple on this.

``Since the arrival of the iPhone 5 is highly unlikely within the third quarter of this year, the iPad 2 will test whether their improved service policies work effectively,’’ said Park Jong-su, an analyst at Hanwha Securities.


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