The growth pace of the domestic smartphone market is slowing dramatically this year, an apparent blow to both telecommunication operators and handset makers.

The average on-quarter increase of new smartphone subscriptions until August marked 13.5 million, down from 25.4 million last year, according to the Ministry of Science, ICT and Future Planning and telecom industries.

During July and August, the number of new smartphone subscribers stood at 760,000, and is expected to be around 1 million during the third quarter this year.

The number of new subscriptions in the second quarter of this year recorded 1.2 million, down from 1.6 million during the January-March period.

The figure has been on a constant decline since the first quarter of last year when it recorded 3.1 million, to 2.6 million in the second quarter, 2.5 million in the third and 1.6 million in the fourth.

In percentage terms, the growth rate decreased from 4.7 percent during the first quarter of 2012, to 3 percent during the October-December period last year.

“The stagnant growth pace indicates the market is nearing saturation,” a market analyst said.

As of August, the total number of smartphone users in Korea stands at 36.3 million or 67.1 percent of 54.2 million mobile subscribers use smartphones, up from around 35.5 million in the April-June quarter this year.

A June report by Strategy Analytics projected the Korean market would reach a 79.5 percent penetration rate of the smartphone market this year, and earlier this month the leading mobile market research institute said Korea’s smartphone market will likely post negative growth this year, and will not recover last year’s sales level for at least the next six years.

The U.S.-based institute predicted the sales of smartphones this year to fall to 26.3 million units, down 14 percent from 30.7 million sold last year.

Market experts said the Korean market nearing saturation encouraged the domestic handset makers to pick up the pace for sales efforts in foreign markets.

Samsung is the best-selling handset brand in India, which has an 18 percent penetration rate of smartphones according to Nielsen, with its low-end handsets priced around $100-$200 such as the Galaxy Star models.

The firm is also the top smartphone seller in China, taking up 19 percent of the market share.

By Kim Young-won (wone0102@heraldcorp.com)