Sales of Samsung's Galaxy A7 that hit store shelves last month reached 100,000 in less than a month. One industry insider said, "Chinese smartphones have improved drastically and pose a big threat to Korean rivals, so Samsung and LG are going on the defensive."

The new cheaper phones have all the functions of premium phones as technological differences between products dwindle to minute tweaks, so frugal consumers rarely lose out.

Competition is intensifying in the Korean market for low to mid-priced smartphones ahead of the Christmas season. Xiaomi was the first to release a new phone in this category through the three major Korean telecoms, and Samsung and LG are following suit with their products priced between W200,000 and W400,000 (US$1=W1,127).

On Monday, Samsung launched the Galaxy J4 Plus priced at around W200,000. It has a multitasking function that allows two apps to be run simultaneously. A Samsung staffer said, "We're targeting teenagers and 20-somethings who exchange messages with their friends while surfing the Internet or watching movies."

LG rolls out the Q9 next month, which is priced at around W400,000. It has improved screen clarity under outdoor lighting conditions as well as high-quality sound, the same features found in its premium G7. The only differences are that the Q9 has less memory capacity and fewer cameras.

Chinese companies are aggressively targeting the market segment here. Xiaomi launched the Pocophone F1 on Monday priced at around W400,000, the first time a Chinese smartphone is being sold through the three major telecoms here.

The Pocophone F1 has 64 GB of memory and a 4,000 mA battery, which are usually features of premium phones. Huawei joined hands with KT to launch the affordable BeY3 last month that has two cameras on the rear.

In collaboration with China's ZTE, low-cost mobile operator SK Telink rolled out a phone last week that only costs around W100,000 and also targets young consumers. The phone allows games, social media and Internet search functions to be shut off while studying.

One industry insider said, "We are seeing back-to-back releases of unique smartphones targeting various consumer groups as premium functions are being lowered to meet frugal tastes."