In something of an interesting move, LG recently announced its plan to start carrying Apple products like the iPhone inside of its retail stores in South Korea. And, not surprisingly, some local smartphone distributors are none too pleased with the development.
According to The Korea Herald, critics of the announcement pointed to previous LG agreements wherein the company “pledged to strive for co-prosperity with small players in the industry.”
Per the agreement in question, LG said it would only sell LG devices at its line of stores, with the overarching goal being to not put smaller phone distributors at a distinct disadvantage.
The agreement, however, allows room for some contractual adjustments should major circumstances change. And to this end, you may recall that LG back in April of this year announced its plan to leave the smartphone business entirely due to an inability to make a sufficient profit.
While LG said it would still sell existing inventory, and continue to support devices that are already in the hands of consumers, the company is otherwise exiting the mobile phone business entirely.
At the time of its announcement, LG explained that its “strategic decision to exit the incredibly competitive mobile phone sector will enable the company to focus resources in growth areas such as electric vehicle components, connected devices, smart homes, robotics, artificial intelligence and business-to-business solutions, as well as platforms and services.”
“Moving forward,” the company’s press release went on to say, “LG will continue to leverage its mobile expertise and develop mobility-related technologies such as 6G to help further strengthen competitiveness in other business areas. Core technologies developed during the two decades of LG’s mobile business operations will also be retained and applied to existing and future products.
And so, with LG leaving the smartphone business, the company clearly believes that that’s big enough of a circumstance shift to justify its decision to carry Apple products.
Apple, according to the Herald, is keen on partnering up with LG to help boost iPhone sales in South Korea. But smaller smartphone distributors “that receive commissions or subsidies from phone vendors are concerned about losing their volumes from Apple.”
While it remains to be seen how this all plays out, some anticipate that LG and the Korea Mobile Distributor Association will be able to come to terms. Barring that, the Korea Commission of Corporate Partnership may have to step in and issue a ruling on the matter.
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