Samsung's 'iPhone-only' display lines are idling, and Apple may compensate with iPad OLED orders

Samsung's 'iPhone-only' display lines are idling, and Apple may compensate with iPad OLED orders
In today's edition of crazy news, Samsung is apparently gunning to be compensated for OLED panels it didn't make. Remember when Apple signed a contract for a 100 million screen panels at about $70 apiece, making iPhone displays the most expensive part in them by far?

Those were the days when Apple hoped its "revolutionary" Face ID technology will be gobbled up by iOS users worldwide, and it jacked up the price of the first handset that had it - the iPhone X - to unseen heights. Fast forward to 2019, and not only the iPhone X didn't do as well on the market as predicted, but also the subsequent iPhones with OLED displays aren't selling as well as hoped for various reasons.

That leaves Apple's main OLED display supplier - Samsung - in the wind, and in the red, as it built factories and production lines specifically for the expected tens of millions of iPhones that Apple never sold. Korean media is informing us today that Samsung is restless about the issue, and is demanding compensation for all those multi-million screen panel contracts that have left its dedicated equipment languishing at 50% capacity for years on end now. The two companies have reportedly met numerous times to find a common ground on the matter.

It's a symbiotic relationship, though, and the industry insiders tip that it is rare for a screen maker to demand punishing fines for softish demand but rather prefer to work something out with the phone designers. In Apple's case, the solution reports are contradictory. 

Apple's iPads and Macs may switch to OLED displays


On one hand, there is a claim that Apple has already paid Samsung hundreds of millions of dollars to make up for the lost business that brought Samsung Display's earnings drastically down - from $4.9 billion in 2017 to $2.3 billion last year. On the other, Apple has reportedly offered to order OLED panels for other products than the iPhone, including iPads and Macs, as a means to ramp up production, says one unnamed "industry official":

 

Of course, the two aren't mutually exclusive, as Apple may have simply pre-paid for those rumored future orders. This is why we wanted to ask you whether you think that Samsung can demand compensation from Apple for built but underutilized "Apple-only" OLED production lines.

Can Samsung demand that Apple pays for underutilized "iPhone-only" OLED lines?

Yes, cash
37.01%
Yes, with extra iPad and Mac OLED panels business
42.94%
No, demand is fickle and in business there is risk
20.06%

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20 Comments

1. Leo_MC

Posts: 7432; Member since: Dec 02, 2011

It depends on the contract and how much is at stake.

5. sgodsell

Posts: 7321; Member since: Mar 16, 2013

Most likely Samsung signed an agreement that stated how many OLED panels Apple would be purchasing. With that said, if Apple cut its own production for it's own iPhones, then that is not Samsung's fault. So most likely Apple will have to pay, especially if it's in their contract.

7. Leo_MC

Posts: 7432; Member since: Dec 02, 2011

Or maybe the contract is saying that Apple has to pay a different price, if it orders less than it was agreed; maybe the price is the same, but Apple is going to have to buy more memory chips or TV sets or laptops. That’s called speculation and it’s being done by stupid people.

9. Back_from_beyond

Posts: 1411; Member since: Sep 04, 2015

You're speculating, guess that makes you stupid too.

10. Leo_MC

Posts: 7432; Member since: Dec 02, 2011

What have I speculated?

16. sgodsell

Posts: 7321; Member since: Mar 16, 2013

It's no secret that these companies write contracts for deals. That is a given. Now it's also no secret that Apple has no love for Samsung, and vise versa. So why would Samsung try to give Apple a deal that would give Apple any benefit over Samsung? Try to remember that Samsung doesn't buy a thing from Apple. Where as Apple buys memory, storage, displays, and other components from Samsung. So if I was Samsung, and Apple came to me. They I would say to Apple since you are so nice to us all the time Apple, then we will give you a special FU fee, especially since you have lots of money kicking around. Oh, and if you really want to buy our great components, then you have to sign this part of the contract that states if you don't buy this much, then you have to pay this fee, and maybe this fee as well. Especially since your such a great customer of ours. Now have a nice day Tim Crook. Sorry I meant to say Tim Cook. But hey it's all speculation, right Leo_MC? Have a nice day Leo_MC.

18. Mike88

Posts: 368; Member since: Mar 05, 2019

Do you know anything about bussines?? It's not like how you buy budget detergent from nearby store

19. Leo_MC

Posts: 7432; Member since: Dec 02, 2011

"Speculating" means to offer opinions as being true, without having any evidence to support them. You may do what you say, but what makes you think that Samsung thinks the same?

2. shawman

Posts: 48; Member since: Sep 18, 2012

Samsung makes best panels. Apple cannot piss them off for sure. But I like the idea of Oled iPad and Macbook. Also this could mean more Oled Laptop panels and that would be great. Even in Windows realm. Already most major laptop manufacturers have 4K oled panels. I hope price also goes down. Surface book with Oled would be awesome.

4. User123456789

Posts: 885; Member since: Feb 22, 2019

Oled for laptops are pretty rare. And it is not good idea. Imagine if you use Windows with the bar down there. The all menu of Office etc .. Burn in will show up much faster than cellphones.

3. ph00ny

Posts: 2028; Member since: May 26, 2011

Considering the fact that price is usually set based on certain number of displays expected to be built, apple will either have to pay a higher price per display or substitute to meet the expected figure

6. jellmoo

Posts: 2573; Member since: Oct 31, 2011

Jeez, can you even imagine the price of a Macbook with an OLED panel?

8. Vokilam

Posts: 1181; Member since: Mar 15, 2018

This makes me happy. If sales of iPhones is stagnating - Apple would wither have to break the box and push the envelope or lower their prices. Because I like iOS and would like to stay.

11. Back_from_beyond

Posts: 1411; Member since: Sep 04, 2015

You clearly don't know Apple

12. monkeyb

Posts: 413; Member since: Jan 17, 2018

Ehhh. Lowering prices!! The Tim Cook I know will increase prices if things are going bad. The only thing we can hope is for competitors will also build panels so Apple will not push the burden on consumers.

13. JMartin22

Posts: 2370; Member since: Apr 30, 2013

Yeah.... people who tend to buy laptops tend to do it for work or recreation (gaming usually) - OLED laptops would have their life expectancy decrease significantly faster on a laptop than a phone display. Because there are more static UI elements on the display and people tend to use laptops consistently longer for outlines reasons; you’ll see a significant decrease in brightness, color accuracy (subpixels have different longevity ratings, leading to discoloration), and of course burn in; all of this because the display panel would experience permanent degradation through prolonged and consistent use. OLED panels are nice out of the box, but a bad long term investment.

15. geordie8t1

Posts: 296; Member since: Nov 16, 2015

Using OLEDs in Samsungs for as oong as I can remember, and have never suffered burn it ever, in probably over 30 products, in the earlier years that was an issue but nowadays that virtually doesn't exist, there are the odd reports and cases of burn in but out of the billions of oled screens used worldwide over the past lets say 8 years, but the figures for screen burn is is basically zero

17. KingKong75

Posts: 1; Member since: Jun 21, 2019

Samsung does not use Oled, otherwise they won't have the issue to idle their factories. They use Amoled (based on Led technology). Amoled has oled only in its name... For TV, Samsung has an another trick to make you confused : Qled Next step, i bet they would have 0led and will pretend it is better than Oled. LOL

20. JMartin22

Posts: 2370; Member since: Apr 30, 2013

Your perceived anecdotes don’t change the reality. Also, I could contrast your story with findings and usage of multiple OLED Samsung flagships over the years. OLED is a bad technology because of its inherent longevity properties. It needs to be phased out for MicroLEDs ASAP. The latter being superior in every single way.

14. geordie8t1

Posts: 296; Member since: Nov 16, 2015

Samsung will be entirely right if it has a contract with apple to purchase X amount of panels from its factories, it all depends on the negotiations between the companies, regardless of how the market is or how drastically over priced the oled iphones where its about whatever deal they stuck,

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