[Chipflation II] A 2 million won laptop for 40,000 won a month? Samsung a...

Consumer paradigm shifts from ownership to experience as subscription services expand

An alternative that lowers upfront costs while giving companies a stable source of revenue

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The home appliance and IT industries are being rattled by fears of “chipflation.” A global surge in AI investment has sent memory chip prices soaring, raising cost burdens and pushing up consumer prices. Insight Korea examines, in a two-part series, how the semiconductor industry’s “supercycle” is affecting the finished-goods market and how companies are responding.

[Insight Korea = Nam Bit-haneul]

As “chipflation,” triggered by a sharp rise in memory semiconductor prices, feeds into higher prices for finished products and stokes concerns about weaker consumer spending, subscription services are emerging as a win-win solution for both companies and consumers.

According to industry sources on the 20th, subscription services allow users to pay a fixed monthly fee to use products or services. For companies, that means securing stable monthly revenue; for consumers, it lowers the burden of upfront purchase costs while offering various benefits.

South Korea’s subscription economy has grown sharply from about 25.9 trillion won in 2016 to around 100 trillion won last year. The shift reflects a changing consumer mindset, especially among younger generations, that values experience over ownership.

Subscription instead of purchase lowers the price burden

Against this backdrop, LG Electronics has moved quickly to introduce subscription services and has taken the lead in the market. It now offers subscriptions not only for household appliances such as refrigerators, washing machines and air conditioners, but also for home entertainment and IT products including TVs and laptops.

Laptops, which have recently come under the influence of chipflation, are drawing particular attention because subscription services can help ease the price burden. According to LG Electronics’ official website, the 2026 model “LG Gram Pro AI 2026” is priced at as low as 2,073,900 won with maximum discounts, but can be used for 42,800 won a month under a four-year subscription plan.

LG Electronics’ subscription business has continued to grow year after year, establishing itself as a cash cow. Related revenue rose from 734.4 billion won in 2022 to more than 2.5 trillion won last year. Subscription sales accounted for 53% of the company’s total home appliance revenue last year.

LG Electronics plans to continue expanding its subscription services this year. During its earnings conference call in late January, the company said, “Demand for AI-based smart premium appliances is expected to grow, along with service-bundled markets such as subscriptions,” adding that it would accelerate its strategy to upgrade its portfolio across two-track operations, business-to-business, online and subscription channels.

Samsung Electronics is also operating an “AI Subscription Club” so consumers can use the latest AI home appliances at affordable prices. It has also launched the “New Galaxy AI Subscription Club” for mobile product users.

The New Galaxy AI Subscription Club features guaranteed residual values of 50% when a device is returned after one year of use and 40% when returned after two years, along with benefits including “Samsung Care+ Smartphone Damage+.” It has been well received among consumers in their 20s and 30s, who tend to have strong interest in the latest IT devices and replace their phones more frequently.

In particular, Samsung upgraded the New Galaxy AI Subscription Club ahead of the launch of the Galaxy S26 series late last month. During preorders for the new series, the subscription take-up rate reportedly reached 30%. Analysts say the increase was driven by upgraded benefits combined with growing demand to reduce upfront purchase costs as product prices rise.

Lee Eun-hee, a professor of consumer studies at Inha University, said, “Through subscription businesses, companies can not only generate stable monthly revenue, but also maintain continuous contact points with consumers and carry out a variety of promotional activities.” She added, “From the consumer’s perspective, the advantage is that the initial barrier to purchase is lower.”

Still, some experts say careful comparison is needed before signing up for a subscription service. Lee said, “Depending on the case, the total cost of a subscription can be higher than an outright purchase,” and advised that “consumers should always compare the total amount paid over the subscription period with the purchase price before making a decision.”

-This article was translated by ChatGPT. (이 기사는 챗GPT가 번역했습니다.)