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Apple squabbling with Samsung over OLED display prices for the iPhone Xs

Apple squabbling with Samsung over OLED display prices for the iPhone Xs
Despite the Korean supplier industry worries about the tepid sales of the iPhone X in this and the next quarters, Samsung is gearing up to start mass production of the iPhone Xs displays next month, report local publications. Apple, as well as analysts following it, initially forecast overall sales of the X at a cool 100 million, and the OLED display orders to Samsung indicated it in all earnesty, too.

The high price, and people's changing habits to keep their current phones longer, however, threw a monkey wrench in those plans, and iPhone X suppliers reportedly got a 50% order cut this quarter, including Samsung, which was left with OLED display production overcapacity. This is a huge cut for the Korean parts industry orders, and the companies were hoping for a recovery in the second half of the year, when Apple gears up for the rumored two new iPhones with OLED screens.

Their prayers might have been heard, as reports are that Samsung has restarted production at its OLED plants, and is prepping to ship a 100 million panels in total this year, 25 million for the iPhone X, and 75 million for its successor, provided that Apple agrees on the price. Last year, almost a third of the tag to produce an iPhone X went to Samsung, and Apple is looking for ways to cut that, so that it can be more flexible with the final retail pricing of the Xs, or whatever follows.

The negotiations are still in flux, and a recent visit of Samsung honchos to Apple's HQ didn't end with mutual understanding. To reach Apple's lower tag demands, Samsung has apparently offered to supply the Y-Octa panels that it uses for the S9+. These are cheaper to produce, though the yield might not be enough for Apple's mass quantities. Still, the insiders say that Samsung will start slow, with 2-3 million panels next month, and double that from June, so there might be light at the end of the OLED tunnel for all involved, including for LG, which is said to produce the screens for the larger, 6.4" iPhone Xs Plus.

Still, Apple is said to have much humbler estimates for the sales of its OLED iPhones this year, and will be betting on an eventual more affordable LCD model instead. That one, dubbed the iPhone 9, is expected to sport a 6.1" screen, but it will be supplied by Japan Display and Sharp, apparently, leaving crumbs for Korean companies. While Apple's renewed interest in LCDs is said to result in 150 million units of the iPhone 9 sold overall, up from a 100 million forecast before, the switch may come entirely from the diminished orders for OLED iPhones. Still, it remains to be seen how these preliminary numbers pan out in the end. 

source: The Bell & ETNews (translated)

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