LG announced its exit from the smartphone market in April. Two months on, LG is in discussions with Apple to sell iPhones inside LG Best Stores in South Korea, but the plan is now facing some backlash.
LG selling iPhones inside stores isn’t fair, say local players
The Korea Herald is reporting that the Korea Mobile Distributor Association, an organization that represents local smartphone distributors, has criticized LG’s plans to stock Apple products like the iPhone and iPad inside its flagship retail stores. The association has sent a letter voicing its concerns to the Korea Commission for Corporate Partnership and asked it to intervene. It cited a 2018 agreement in which both LG and Samsung pledge to strive for co-prosperity with local players.
It seems the main issue is the extra competition that local players will face from LG selling Apple devices in its stores. The iPhone currently accounts for around 25% of local smartphone shipments, with that expected to rise following LG’s exit.
If LG starts selling the iPhone and iPad inside its retail stores, smaller Korean players could lose a huge chunk of their sales commission, in turn making it harder for them to compete with bigger companies.
The commission’s focus is creating a fair and transparent environment for businesses. In a statement, the commission said; “both sides will need to coordinate and come up with a new agreement on the issue.”
Only time will tell what the outcome of this will be for LG and Apple. But the retail deal between the two has still not been finalized, so it may fall through and LG could be left without new products to fill the empty space in its retail stores.