Apple is seeking a price cut of nearly 10% for Samsung's OLED displays
Apple is reportedly seeking a price cut from Samsung on the price of OLED panels. Apple’s first device to sport an OLED display, the iPhone X, has so far seen much weaker demand than initially anticipated, which has forced Apple to cut orders by up to 50%. One of the main reasons behind this, unsurprisingly, is reportedly the high price of the smartphone.
Now, despite recent reports that claimed Apple’s next flagship devices would be even more expensive than the company’s current iPhone X, Apple appears to be negotiating a near-10% price cut with Samsung in the hope of cutting costs which, ultimately, should allow the company to bring down prices slightly and improve demand. After all, OLED panels equate to nearly a third of the total iPhone X production costs, and, if successful with negotiations, Apple will have guaranteed itself a $10 price cut per panel down to a new $100 price tag. This new deal could also prove beneficial to Samsung due to the fact that Apple is expected to up display orders to a total of 100 million units, of which 25 million will be for the current iPhone X, and the remaining 75 million will be for the company’s 2018 devices.
It’s reported that Apple had initially hoped to use other manufacturers in its negotiations with Samsung in the hope of forcing it to lowers its prices. According to recent reports, however, the likes of LG and others are not yet capacitated to reach the demand Apple requires, with the only option being Samsung, which therefore removes any guarantee that the Silicon Valley-based company will receive its price cut. Interestingly, however, it was recently mentioned that Samsung had reportedly offered Apple use of its Y-Octa panels which are currently present in the Galaxy S9 lineup and are much cheaper to produce.
Now, despite recent reports that claimed Apple’s next flagship devices would be even more expensive than the company’s current iPhone X, Apple appears to be negotiating a near-10% price cut with Samsung in the hope of cutting costs which, ultimately, should allow the company to bring down prices slightly and improve demand. After all, OLED panels equate to nearly a third of the total iPhone X production costs, and, if successful with negotiations, Apple will have guaranteed itself a $10 price cut per panel down to a new $100 price tag. This new deal could also prove beneficial to Samsung due to the fact that Apple is expected to up display orders to a total of 100 million units, of which 25 million will be for the current iPhone X, and the remaining 75 million will be for the company’s 2018 devices.
In any case, Apple appears to have learned from its mistakes, with the company said to be expecting much more conservative sales figures when it comes to the upcoming iPhone Xs and Xs Plus. Instead, the tech giants now expects the cheaper LCD-sporting device to be the biggest seller of the upcoming trio.
source: Digitimes
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