In Korea, there’s money in broken phone screens

On a recent Saturday morning, a woman named Park, 27, visited the Samsung Service Center in Mapo District, western Seoul. Something was wrong with her smartphone’s display.

Park had been alerted in advance to a secondary market in faulty, secondhand displays. So after the phone was repaired, she left the shop - carrying the broken display. That’s when the bargaining began. A man in his 50s roaming around suddenly came near and said he wanted to buy it.

Then a gang of teenagers, who were watching the exit, rushed over and suggested a better deal. The man and a teenager began to quarrel and Park, not wanting to be caught in between, scurried away.

“I think I’d rather send it to an online retailer,” said Park. “I paid 88,000 won [$85] to replace the display and I can earn about half of that back by selling the broken one.”

All morning long at the Samsung Service Center in Mapo the scene replayed itself out. The scouts managed to buy some broken displays but they lost out on many, too, because of the intense competition.

“We don’t want too many people to know about the market because the competition is getting fierce every day,” said one of the teenagers.

The market in broken smartphone displays is a relatively new phenomenon. Smartphones were first introduced in Korea in 2010, and smartphone owners were not aware that they could sell a broken display until early last year.

The broken displays are resold to traders and exported to foreign countries, mostly China and Hong Kong. They are reprocessed and used to make imitation smartphones.

The market for broken displays is restricted to Samsung smartphones with active-matrix organic light-emitting diode (Amoled) screens. LG Electronics, the country’s second-largest smartphone maker, is using in-plane switching (IPS) displays, and it’s hard to reuse them.

At the Samsung Service Center, scouts have even set up chairs to work all day on Saturday. But the LG Electronics service center - only 200 meters (218 yards) away - was quiet.

When it became known on social media last year that users could profit from their broken smartphone displays, Samsung worried that a counterfeit smartphone market could harm its reputation.

It announced in April 2013 that it would not give the broken displays back to people bringing in their phones for repairs.

It reversed the policy in December because customers demanded their broken displays. They said they were their property, and Samsung had to agree.

Agents interested in buying the displays sprung up online and on the street, and competition bloomed. That’s when the buyers began showing up at Samsung’s service centers.

“We used to buy 400 to 500 broken smartphone displays a day, but it dropped to only 100 to 150 recently,” said Kim Si-joon, president of LCD World Display, which claims to be the country’s biggest buyer and exporter of broken displays.

“It is difficult to keep up the business because the competition shrunk the profit margin per display, too.”Severe competition is killing smaller offline shops. “We are now hardly buying displays and thinking of closing the business sooner or later,” said the owner of a small retailer located in Jongno District, central Seoul.

Samsung dealt a critical blow in April, announcing that it would give a discount to customers of the Galaxy S5 or more recent models when they have their broken displays fixed - and leave behind the broken displays.

Galaxy S5 owners, for example, now pay 164,000 won to replace their displays.

But if the owner leaves behind the broken display, he or she only pays 102,000 won. “We would like owners of the new models to sell to us, but buying a Galaxy S5 display for around 60,000 would not be very profitable,” complained Lee.

Analysts say the trade in broken displays isn’t good for a variety of reasons.

“Broken displays can also be used to steal important information or techniques in foreign countries,” said Prof. Kim Si-wol of the department of consumer information science at Konkuk University. “Authorities should come up with regulations to prevent technology leakage.”

BY KIM BONG-MOON [bongmoon@joongang.co.kr]