Electronics company LG has ceased plans to sell iPhones and other Apple products in its South Korea-based retail outlets after experiencing significant pushback from the public and the South Korean government. LG announced the company had stopped manufacturing mobile phones back in April following years of poor sales, costing the company millions. In the wake of the news, LG reassured customers that LG phones would continue to receive Android OS updates for up to three years, all limited warranties would be honored, and replacement parts would be provided as was obligated.
The LG Mobile unit struggled to establish itself among larger competitors like Samsung and Apple, despite trying to make its products stand out by playing with the expected form factor of a common smartphone. LG sought multiple buyers for its mobile division in the months preceding the announcement of its decision to cease production, but was ultimately unable to make a deal. LG plans to fully shut down and close LG Mobile by July 31.
With the shelves of LG’s retail locations needing phones to fill them, there had been speculation building that LG was partnering with Apple to start selling the iPhone-maker's products in its physical stores throughout South Korea. However, SME Daily reports that those talks have been “temporarily suspended” following pushback from smaller retailers and consumers. Reportedly, the South Korean government holds the position that “large retail outlets shout not threaten the survival of small retail stores” that have been impacted by the COVID-19 pandemic. There is also a fear that LG might suspend employee training for Apple products.
What Does Samsung Make Of This?
Perhaps the largest player in all of this is Samsung, the current leading smartphone manufacturer in South Korea. According to recent reports, Samsung had begun pressuring LG to sell Galaxy phones in its Best Shop locations alongside iPhones. Per Herald Business, the compromise comes after Samsung tried to use the clause of a 2018 agreement between the two companies that required only LG phones be sold at LG stores and Samsung-branded phones to only be sold in Samsung's stores. Samsung was also reportedly pressing LG to agree by appealing to the big three telecommunication companies in South Korea: KT Corporation, SK Telecom, and LG U+.
Samsung has a vested interest in reducing Apple’s ability to get a foothold in South Korea. While it is currently the leading seller in the country, that could change quickly if Apple was allowed to sell its products in LG's 400+ stores without any competition. While Samsung might be primarily concerned with iPhone moving into its domestic market, the pull of Apple’s other products could also lead to losses for the company.