Only a month after the official release of Apple’s iPhone 5 in Korea, the price has fallen to one-quarter of its shipping price on some online sites over the weekend.

The Apple’s latest smartphone was offered at 199,000 won ($188) at ppomppu.co.kr among other group purchase sites beginning Friday.

The shipping price of the iPhone 5 is originally 814,000 won. However, the cost of the gadget itself has dropped to 329,000 won thanks to massive subsidies by the telecom and device manufacturer. Then, an additional promotion fee of 130,000 won kicks in if the buyer decides to stick to a 62,000 won monthly subscription plan for two years.

This indicates that the new owner of the 16-gigabyte iPhone 5 will ultimately get the handset for 199,000 won, according to the postings on the sites. Such offers were available if the user decided to make the switch to become a subscriber of top mobile carrier SK Telecom.

This is a shock to the industry since the telecoms did not need to give large subsidies for the iPhone in the past due to strong demand.

But things started looking different since the release of the iPhone 4S here ― it was not as popular as expected.

Industry insiders also said that the new iPhone 5 is seeing a weaker-than-expected demand in Korea, which has largely contributed to the cut in its selling price.

Mobile carriers SKT and KT had projected at the time of the iPhone 5 launch ― Dec. 7 of last year ― that they would sell more than 1 million units of the device by early this month, but sales were a mere less than 500,000 units, the said.

On top of such figures, rumors are rising that Apple will roll out a new higher-end handset, possibly called the iPhone 5S, as early as June, pushing the price fall of the iPhone 5.

Local handset manufacturers like LG Electronics, Samsung Electronics and Pantech are also getting ready to unveil their new smartphone lineup in the first half of this year.

LG is especially moving ambitiously to show off its first 5.5-inch Full High Definition display smartphone that has the code name “GK.” It is planned to be unveiled by March.

Samsung will also launch the Galaxy S4 in the first half of this year.

“There were a number of Apple lovers who waited for months for the next iPhone in the past, but it looks like many have come to a conclusion that handsets manufactured by local tech firms can now compete with the iPhone,” said an industry source.

On a related front, the Nikkei reported that Japanese smartphone display makers such as Japan Display and Sharp have begun curtailing the production for the iPhone 5 starting this month.

It said Apple had planned to order up to 65 million smartphone display panels in the first quarter of this year from the two firms, but decided to halve the order.

About 40 percent of the iPhone’s components like display panels, memory chips and batteries are known to be manufactured in Japan.

By Cho Ji-hyun (sharon@heraldcorp.com)