South Korean authorities reportedly raided Apple’s office in Seoul earlier this week, just ahead of the launch of the company’s 2017 flagship — the iPhone X.
While both Apple and South Korean authorities are silent on the reason for the raids, a report in Metro.UK on Thursday said it was done with regard to Apple’s business practices in the country.
According to both Metro and Apple Insider, the timing of the raid is conspicuous and could have been done to hamper the success of the iPhone X, which is launching in the country on Friday.
South Korea is the home ground of Apple’s biggest rival — Samsung. While Samsung’s flagships for the year — Samsung Galaxy S8 and Note 8 — have done well in terms of sales, the iPhone X has definitely outperformed them globally. Apple’s devices are also fast catching up to Samsung’s offerings in South Korea itself.
An investigation was launched last year into Apple’s business dealings will local carriers with the South Korean Free Trade Commission. The South Korean FTC has been specifically looking into the company’s contract terms with local carriers, which included the carriers signing up for a specific number of iPhones, sharing a burden of the repair costs and the limitation period of an year on all repair firms for any disputes with Apple.
The circumspect timing hints at the connection between local smartphone makers and the South Korean government. Samsung and its affiliates have a deep reach in the South Korean economy — the company is responsible for one-fifth of the country’s economy.
iPhone X has been already declared sold out in South Korea since pre-order opened in the country. It has been reported that the device’s pre-orders in the country exceed 300,000 putting a huge dent in its rival’s sales. This is too close for comfort for Samsung, which has a big following in the country. Its Galaxy Note 8 received 3,95,000 pre-orders in South Korea in the first 24 hours after its launch in the country in August.
Samsung, on the other hand, has been previously accused of bribing South Korean government officials — its heir Lee Jae-Yong was arrested last year on bribery and other charges.
The South Korean government was accused in 2015 by Roger Kay, the associate president of tech company Endpoint Technologies, of running a protectionist agenda in the country. In his article in Forbes, which was published on June 22, Kay accused the South Korean FTC of giving preferential treatment to local firms in comparison to international firms.
“The KFTC [Korea Fair Trade Commission] has pretty much run amok in recent years, slapping spurious charges on foreign companies as it attempts to execute a protectionist agenda that it thinks benefits entrenched South Korean manufacturing interests,” Kay stated in his article.
Despite such issues, Apple has been steadily gaining traction in the South Korean smartphone market and currently holds a massive 33 percent market share in the country.