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.
Although they backtracked the following day, the incident caused a storm in Iran where Samsung had a major presence. According to the Washington Post's Adam Taylor, Iran's Ministry of Sports and Youth Affairs blasted the exclusion as "an insult to our athletes, who are representatives of the great, civilized Iranian people, and our peace messengers".
Iran had summoned South Korea's ambassador to Tehran to explain the apparent snub.
Samsung billboards and flagship stores are seen all over Iran , and the South Korean company has sponsored many large-scale cultural events, including the current exhibition at the Tehran Museum of Contemporary Art.
Also, an informed source told the IRIB that ICT Minister Mohammad Javad Azari Jahromi had also demanded the South Korean company to apologize, saying the minister was considering revocation of registration service for Samsung devices on the Iranian network.
If Samsung Electronics does not withdraw from its decision until Thursday afternoon, Iranian Foreign Minister Mohammad-Javad Zarif will not use Samsung any more as he has it now as his cell phone, the source told Islamic Republic News Agency (IRNA).
But athletes from Iran and North Korea were reportedly excluded due to United Nations sanctions against the two countries over their nuclear programmes.
It is likely that the North Korean team's leaders declined the offer on behalf of the whole team. No reason was given, but Internet access is strictly limited in the North.
Samsung, an official worldwide partner of the Games, had prepared some 4,000 Olympic editions of the Galaxy Note8 phone to give to participating athletes as well as IOC staff.
"The IOC has confirmed that the Iranian athletes are entitled to receive and keep the phones".
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.