[비즈한국] Samsung Electronics005930, which has launched the Galaxy S25 featuring AI capabilities at its core, is challenging the way smartphones are consumed through a subscription model targeting 'early adopters.' The 'New Galaxy AI Subscription Club' is a service where users purchase an unlocked smartphone and pay a monthly fee of 5,900 won to receive a cash rebate of half the original list price after one year. Those who return their devices after two years receive a 40% refund of the list price. The three major mobile carriers have also partnered with Samsung Electronics to offer exclusive two-year compensation programs for the S25 series. The strategy aims to reduce the burden of lump-sum payments and drive demand for the latest device upgrades. What are the actual benefits for consumers?
'Subscribe' and S25 Will Be Bought Back After 1 Year
Samsung Electronics, which entered the home appliance subscription business late last year, is expanding its scope to the smartphone sector. The Galaxy series subscription model differs from the typical appliance rental concept, which involves monthly payments over a contract term. It is a form where a separate subscription fee is paid on top of the device price. The core idea is to lower the consumption barrier, making it easier for users to "switch" to new devices by receiving cash compensation after one or two years.
Samsung Electronics launched the New Galaxy AI Subscription Club at the time of the Galaxy S25 series pre-sale on the 24th of last month. By joining the club, users can guarantee a residual value of up to 50% in cash when returning the device. If returned after 12 months, 50% of the Samsung.com base price is guaranteed, and if returned after 24 months, 40% is guaranteed. The condition is to return the existing device within a maximum of 2 months after the product period ends. Exclusions apply for devices with △external damage, △power failure, or △an undeleted account. Samsung Care Plus's 'Smartphone Damage+' service is also applied during the subscription period.
If a user purchases a Galaxy S25 Ultra 256GB on Samsung.com on February 12 and pays a total subscription fee of 70,800 won for one year, they can recover 849,200 won in cash—half of the base price—upon returning the device between February and March of next year. Afterward, they are free to switch to any desired device, such as the next Galaxy model or an Apple iPhone, without any specific restrictions. The strategy is to target users of the latest smartphones and shorten the replacement cycle.
Kim Yong-hee, a professor at Kyung Hee University's Graduate School of Media and Communication, explained, "This is an attempt to increase sales volume by shortening the device replacement cycle in a smartphone market where growth has significantly slowed. While buy-back programs themselves are not new, applying a subscription model is intended to create a psychological effect." An industry official noted, "It is one of the promotional tools to secure device sales volume," adding, "It will likely satisfy the desires of users who prefer the latest devices and expand consumer choice."
Since the subscription club applies when purchasing an unlocked phone with a Samsung Card on Samsung.com or Galaxy Campus, it is expected to drive the effect of direct purchases from Samsung's official channels linked with Samsung Card. According to Samsung Electronics, one out of every five customers who pre-ordered unlocked devices online or offline for this S25 series joined the subscription club. Of these, 60% were in their 20s and 30s, with a high proportion of subscriptions for top-tier lineup models like the 'S25 Ultra.'
Three Major Carriers Also Selling Exclusive Products for a Limited Time, Which Is More Advantageous?
Samsung Electronics has also expanded its compensation subscription via carrier channels. The three major mobile carriers are cooperating with Samsung Electronics to operate exclusive products for the S25 series. This service, available for a limited time until the end of April, is notable for having stronger guarantees than existing carrier device replacement programs. All three companies' services have the same basic framework—providing up to 40–50% compensation of the list price when returning the terminal after two years, and including unlocked phones purchased outside of carriers. Based on the standard product applicable to the S25 base model, SK Telecom017670 and KT030200 offer it at 8,000 won, while LG Uplus032640 provides additional benefits at a slightly higher cost of 9,900 won.
SK Telecom introduced the 'T-Phone Replacement AI Club Service,' which incorporates its used phone compensation program 'T Safe Compensation.' The compensation amount is determined based on the appraised value after two years, and 300,000 OK Cashbag points are provided for the S25 base model. Previously, only up to C-grade devices could be returned, but now compensation is possible even if judged as D-grade (partial functional defects like LCD or charging issues), which is considered to cover almost all types of defects.
KT's 'Safe Change Galaxy AI Club' guarantees up to 50% of the list price for the existing device upon return after two years. During the 24 months of using the service, one exchange to a model with similar year and specifications is also possible (the customer pays an 8% commission of the list price). However, it is the only one among the three companies that requires a deductible (5% of the list price). Exchanges are possible for reasons ranging from simple change of mind to damage or water immersion, in which case the final buy-back guarantee limit is reduced to 20% of the list price.
LG Uplus chose a method of providing Samsung's AI subscription club service for free when subscribing to its existing lost/damage protection product, 'Phone Replacement Pass.' As benefits such as unlimited repairs at official Samsung centers (25% deductible) are provided during the period, the usage fee is 9,990 won, the most expensive among the three companies for the Galaxy S25. While the Samsung subscription club is applied, some existing services that allow device changes due to a simple change of mind are restricted if fees are paid during the subscription period.
Will It Affect the Position of the Three Major Carriers?
As Samsung Electronics aggressively implements its mobile device subscription strategy, attention is focused on whether it will impact demand for unlocked phones and carrier revenue. On the 5th, Samsung Electronics introduced the subscription club service to PC and tablet products as well. Lim Seong-taek, Executive Vice President of Samsung Electronics Korea, expressed his expectations, stating, "The paradigm of mobile product purchasing will change."
The popularity of budget phones and the increase in Galaxy series unlocked phone sales are cited as major factors driving the expansion of the unlocked terminal usage rate (33%). While manufacturers strongly oppose "full-scale unlocked phone systems" (separating carrier subscription from terminal sales) as it could lead to reduced distribution networks or lower list prices, they have no reason to refuse if they can increase the influence of their own channels in the limited unlocked sector. Currently, it is a user-tailored service for those who change devices every 1–2 years, but if subscription models and benefits diversify in the future, it could lead to demand for unlocked phones. The prospect is that as external options such as highly accessible guarantee services increase, mobile carriers will also become increasingly nervous.
Jeong Yeon-seung, Vice Chairman of the Korea Academy of Business Administration (Professor at Dankook University), said, "It is important for manufacturers to hold the initiative in distribution and sales to maintain and strengthen their brand competence. The subscription model can be seen as an effective sales method in that manufacturers can directly secure and manage customer touchpoints."
The telecommunications industry anticipates that the impact of Samsung Electronics' subscription model will be limited. An industry official said, "Carriers provide guarantee services primarily to customers who sign up through agencies or online platforms. Since similar services already existed at each company and the target users are different, there will likely not be a direct hit." Professor Kim Yong-hee pointed out, "The effect of stimulating the purchasing desire of early adopters will certainly appear," but added, "For this model to be successfully established, prices and benefits would need to be better than those of other distribution networks and carriers."