On Friday Patently Apple posted a report titled "In Samsung Country Apple Fans lined up overnight to get their hands on the latest iPhones and Apple Watch 4." The news of South Koreans lining up around the block to purchase iPhones has apparently set some heads on fire. This morning a wildly angry Korean report using anonymous wireless carrier and industry sources lashed out at Apple for not subsidizing iPhones like Samsung does.  

Just days after Apple's new iPhones went on sale in Korea and Apple announced another record breaking Quarter, an angry Korean report lashed out stating that "Apple is going against the South Korean government’s policy to reduce consumers’ telecom expenses, while making huge profits in the South Korean market. An increasing number of local consumers are complaining about the company’s business practices."

The Korean report further stated that "Apple recently released new high-priced iPhone models -- the iPhone XR, iPhone XS and iPhone Max. The company provides no subsidies to consumers who purchase these expensive devices. This is in stark contrast to South Korean smartphone manufacturers, who provide subsidies to consumers together with mobile carriers.

The jealousy from competitors was recorded in the Korean report as well when they quoted an "industry source" complaining: "When it comes to Samsung Electronics and LG Electronics, the ratio of smartphone subsidies they provide to consumers ranges from 10% to 50%," said an industry source, adding, “However, Apple provides no subsidies to consumers, shifting the burden to local mobile carriers."

A conveniently unanamed South Korean analyist stated that "Besides, Apple is continuing to raise the prices of the iPhones, going against the government’s policy to reduce households’ telecom expenses. The latest iPhones are priced at almost two million won. The company is taking advantage of the Korean government’s policy to reduce consumers’ telecom expenses. In South Korea, a mobile carrier is required to provide a discount of up to 25% when a customer purchases a smartphone at its store. The purpose of this policy is to block mobile carriers from raising the prices of their services. Apple is currently taking advantage of this policy to shift the cost burden to mobile operators.

As a result, local mobile carriers are witnessing a decline in profitability while Apple’s profits are increasing. Under the circumstances, experts point out that the application of the policy should be limited to inexpensive phones. 'Then, mobile phone manufacturers will provide subsidies to customer who purchase their expensive phones and wasteful mobile phone consumption will be reduced on the part of consumers."

The report added that "Apple’s business practices against the government’s policy are witnessed on the Apple App Store as well. At present, controversy is heating up due to inadequate taxation on the company’s annual App Store profits, which are estimated to reach one trillion won to two trillion won in the South Korean market alone. Based on international tax treaties, the South Korean government currently imposes corporate and income taxes related to Internet business profits only on business operators that have their servers in South Korea. Apple’s App Store servers are located abroad."

An unnamed Wireless Carrier told the publication that "Apple has paid little regard to its business partners and consumers in South Korea, too. 'The company has put pressure on us by saying that it cannot allocate new iPhones unless we preorder the products a couple of years ahead.'"

In the bigger picture, Patently Apple posted a report last December titled "Korean Telecoms Complain they're Unduly Pressured by Apple to pay for a new Computer System just for selling iDevices." So this is now becoming an annual complaint fest by Apple's adversaries when new iPhones are released in South Korea.

It's probably worse this year because Apple's first Flagship store opened earlier this year. Witnessing the huge line-ups around the block last Friday must have had their adversaries heads pop at the wild popularity of the new iPhone line-up over those form Samsung or LG.   

Last year it was reported by us that Apple was under investigation by the South Korean Fair Trade Commission. You'd figure by now that if there was something illegal going on with Apple that it would have been reported on by now.

As to some of their whining, Samsung has for years offered 2-for-1 sales deals to make it appear that they could compete with Apple. It's to make their "volume shipments" appear to be vastly ahead of Apple. It's a marketing ploy which has nothing to do with new subsidies in South Korea as today's Korean report suggests. Samsung has given away their phones in the U.S. as a marketing ploy for years and not because it's a U.S. government imposed demand.

Two thumbs up to the Apple fans in Seoul for standing in line last Friday to pick up new iPhones and two thumbs down to Korean businesses who can't stop whining about Apple's success every year.