News reports said 4,000 of the phones were being given to athletes attending the Pyeongchang Games, but that athletes from Iran and North Korea would be excluded because of worldwide sanctions against the two countries.
"Regarding North Korea, all participants are requested not to take the phones back to their home country but to only use them during their stay in PyeongChang, since that is required to allow them to participate in the Games", the International Olympic Committee said.
After some consideration, the IOC and PyeongChang Olympic organizers announced a compromise: they would provide the phones to the athletes of North Korea and Iran with the condition they be returned after the games are over.
Through a statement provided to Yonhap News Agency on Thursday, the International Olympic Committee said it has asked North Koreans to return the free handsets after the event.
Following that announcement, Iran's Foreign Ministry summoned South Korean ambassador to express strong protest over the decision.
Iranian Foreign Minister Mohammad Javad Zarif threatened to discontinue the use of his own Samsung device.
News reports earlier said 4000 of the latest Samsung smartphones were being given to athletes attending the Winter Games, but athletes from Iran and North Korea would be excluded because of sanctions against the two countries.
That leaves North Korea as the lone nation whose participants in PyeongChang won't be allowed to bring the phones home with them.
A Samsung spokeswoman stressed the electronics giant had nothing to do with the distribution of the handsets and all decisions were by the IOC. There are 22 North Korean and four Iranian athletes at the 2018 Winter Games.
Samsung, the world's biggest smartphone and memory chip manufacturer, is a crucial part of South Korea's economy, with the group's turnover equivalent to a fifth of the national GDP.