A hot potato: After withdrawing from making smartphones, LG is facing the question of what to do with the floor space and personnel previously dedicated to handhelds at its "Best Shop" physical locations, of which there are about 400 across South Korea. The plan is to start selling Apple iPhones, which fellow Korean giant Samsung is understandably upset by.
As reported by Business Korea, LG have been looking to stock Apple products at its Best Shop brick-and-mortar stores, which continue to sell other LG products such as high-end TVs after the company's departure from the phone market.
Now, apparently Samsung has stepped in, citing an agreement signed in May 2018 that restricted manufacturers to sell only LG phones at LG shops and Samsung phones at their own retail locations. Selling Apple phones would violate this agreement, but LG claims that renegotiation can take place in the case of a major change in circumstances.
It's safe to say that LG exiting the phone business entirely is a pretty significant change. Meanwhile, the association responsible is concerned about the impact on smaller phone distributors, which the agreement was meant to protect, though it's agreed that renegotiation is necessary.
LG's physical retail presence in Korea is significant, so it's understandable that Samsung feels threatened by the move, especially as Apple have jumped to lead the market with a 29.8% share of 5G phones with its iPhone 12 series alone. Samsung currently sits back in joint fourth place for 5G handsets. Samsung is allegedly trying to lean on the big three South Korean mobile carriers -- SK Telecom, KT Corp, and LG U+ -- to push for its own phones to appear in Best Shops too.
LG Electronics is set to sell iPhone, iPad, and Apple Watch in LG Bestshop (offline store in Korea) by LG employees from August 1. Now Samsung requested 3 carriers in Korea to indirectly request LG to sell Galaxy phones as well.— Tron ❂ #MicrosoftEvent (@FrontTron) June 25, 2021
Details at https://t.co/INAn3SFaZQ
Samsung may be stuck between a rock and a hard place with these plans. Sharing shelf space in Best Shops would give LG a cut of the income from its latest and greatest Galaxy devices, as well as potentially cannibalize sales from its own physical stores -- but the alternative is allowing Apple products to be sold uncontested at over 400 new locations from the start of August, just in time for the iPhone 13 to arrive in September.