Although they backtracked the following day, the incident caused a storm in Iran where Samsung had a major presence.
"Regarding Iran, we can confirm that all participants will be able to keep the phones", an International Olympic Committee official said.
That ruling prompted a series of stern responses from Iran, which sent four athletes - two alpine skiiers and two cross-country skiiers - to the Winter Games and has long welcomed Samsung's products within its borders, thanks to strong diplomatic and economic relations with South Korea.
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 United Nations sanctions against the two countries over their nuclear programs.
The decision apparently came amid looming anti-Samsung sentiment in Iran after reports that their athletes will not be getting the smartphones reached the Middle East country.
Organizers of South Korea's Winter Olympics apologized to the Iranian team before Friday's opening ceremony for what they called a misunderstanding over gifts of Samsung mobile phones.
These led to the South Korean ambassador to Tehran, Kim Seung-ho, being summoned to the Iranian Ministry of Foreign Affairs.
3 dead in crash of Grand Canyon tour helicopter
A tourist helicopter crashed into the Grand Canyon in Arizona, killing three people and injuring four others, local police said. Hualapai Nation Police Chief Francis Bradley told CBS Phoenix affiliate KPHO three people had been killed.
Oregon Sen. Jeff Kruse Resigns After Investigation Into Harassment Complaints
Jackie Winters, the Senate Republican leader in the Legislature dominated by Democrats, thanked Kruse for his 22 years of service. Throughout her report, Rubanoff makes clear that Kruse regularly violated the standards of conduct expected of state senators.
Kenya, Ethiopia Dominate Lagos Marathon
In the female category, it was an-all Ethiopia show as they claimed the first, second and third positions. Winners of the 10km Family Fun Race will be compensated with brand new cars from GAC Motor.
Iran's ambassador to Seoul Mohammad Hossein Taherian told the country's state-run Islamic Republic News Agency (IRNA) on Friday that Iranian athletes have rejected the offer of the Olympic phone created by Samsung Electronics.
"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.
Games organisers POCOG earlier said: "A letter was today sent from POCOG president Lee Hee-beom.to apologise for the misunderstanding regarding the distribution of mobile phones to the Iranian athletes".
According to a Farsi report by Khabar Online, the committee said the incident took place as a result of "miscommunications within the teams working" on the phone distribution.
"The IOC has confirmed that the Iranian athletes are entitled to receive and keep the phones".
The Pyeongchang 2018 Olympic Games limited edition handset includes the bold new features of the Galaxy Note8, such as the innovative bezel-less 6.3-inch infinity display that the company claims fits comfortably in one hand, enhanced S pen for efficient productivity, and Samsung's best-in-class dual camera.
The cases will feature the logo of the Paralympic Games.