Samsung Electronics' new foldable smartphones "Galaxy Z Fold8, Fold8 Ultra, and Flip8 (collectively, Galaxy Z8)" set a record with 1.44 million units in domestic preorders, the most ever. But the number of mobile number porting cases in the month Galaxy Z8 launched fell about 29% from when the previous model debuted.
On the 7th last year, the repeal of the Mobile Device Distribution Improvement Act and the waiver of penalty fees following the SK Telecom hacking incident coincided, leading to an unusually high number of porting subscribers. This year, with those special factors gone and more consumers choosing unlocked phones and device upgrades, the formula that "a hit new product directly boosts number porting" is weakening.
◇ Galaxy Z8 sales up 38.5%, but number porting down 28.9%
On the 3rd, industry data showed Galaxy Z8's domestic preorders reached 1.44 million units, up 400,000 (38.5%) from the 1.04 million units of its predecessor, Galaxy Z7. It is the largest preorder tally ever among Samsung Electronics foldable smartphones.
The number porting market moved in the opposite direction. In July last year, when Galaxy Z7 launched, the number of porting cases was 956,863, but in Aug. this year, when Galaxy Z8 launched, it totaled 680,346. That is a decrease of 276,517 cases (28.9%) in a year. While sales of the new device rose 38.5%, number porting fell 28.9%.
A base effect from last year's unusually overheated number porting market played a role. In July last year, competition among the three mobile carriers to attract subscribers intensified with the repeal of the Mobile Device Distribution Improvement Act. On top of that, the waiver of penalty fees stemming from the SK Telecom hacking incident drove a surge in subscribers switching carriers. This year, with those one-off factors gone, analysts say the number porting market has returned to normal levels.
◇ Taking subsidies but choosing unlocked or device upgrades instead of porting
A change in how people buy smartphones is also cited as a key factor. In the past, when a new model came out, carriers boosted subsidies and consumers typically reduced handset purchase burdens by porting. Recently, more consumers are buying unlocked devices from Samsung.com or online retailers, then keeping their existing carrier or separately choosing the plan they want. Demand for device upgrades—replacing only the handset while staying with the same carrier—also does not appear in number porting statistics.
Carriers are also targeting unlocked users as a separate customer segment. A prime example is SK Telecom's unlocked-only digital mobile service "air." SK Telecom said that after launching air last year, app membership topped 100,000 in Jan. this year. At that time, 90% of line subscribers were in their 20s to 40s, and more than half chose eSIM, a digital subscriber identity module embedded in smartphones, instead of USIM. Membership has continued to grow since, surpassing 200,000 in Aug.
◇ Lowering the burden of device upgrades without carrier subsidies
Unlocked sales have become a key pillar in Galaxy Z8's performance. According to Samsung Electronics, one out of two preorder customers for the Galaxy Z8 unlocked model signed up for the "New Galaxy AI Subscription Club." Under this program, customers who return their device after a set period get up to 50% of the residual value guaranteed and receive benefits such as Samsung Care Plus. It is designed to reduce smartphone replacement expense even without carrier subsidies.
As unlocked purchases spread, the consolidation between device sales and carrier subscriptions is weakening. Consumers can buy a new smartphone and still keep their existing carrier. After buying an unlocked phone, they can also opt for an MVNO or a plan dedicated to unlocked devices.
The success of Galaxy Z8 shows that while demand to replace smartphones remains strong, it does not necessarily lead to switching carriers. The old chain of "new product launch → subsidy battles → number porting" is diversifying into "unlocked purchase → stay with carrier" or "device upgrade → stay with carrier."
With Apple set to unveil and release new iPhones in Sep., demand for smartphone replacements is expected to continue in the second half. But even if the iPhone is a hit, it remains uncertain whether higher sales will directly translate into growth in the number porting market. That is because consumer behavior is being reorganized around unlocked purchases, reshaping the carriers' number porting competition that used to resurface with every new product launch.