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Samsung is the only company that supplies OLED panels for Apple's iPhone X. The South Korean company was expected to rake in around $22 billion in revenue this year by supplying OLED panels to Apple. Since it was the only company that supplied the display panels for the iPhone, they charged a premium amount to Apple. Well, this might not be the same for the next iPhone.
After the iPhone X saw a decline in sales and demand, has reportedly forced the company to lower the sales cost and cut down component orders from its suppliers, which also includes Samsung. To make things worse, Chinese manufacturers didn't move to OLED panels after the launch of iPhone X, as Samsung expected. This resulted in excess production capacity for Samsung.
Samsung is said to manufacture around 200 million OLED panels this year, out of which 100 million panels will be bought by Apple for the iPhone X and its successor due for launch this year. The production of the OLED panels will kick off next month with the company producing around 2-3 million panels before doubling the number in June.
The local reports claim that both Apple and Samsung are in negotiations over the pricing of the OLED panels, with Apple reportedly asking to slash the price for the panels. Last month, the CEO of Samsung Display had a meeting with Apple executives to settle the prices but failed to reach an agreement.
Although the numbers were never announced, Apple paid around $110 per OLED panel to Samsung, which is almost one-third of the total production cost of the iPhone X. Apple will surely be looking to bring down the cost of the iPhone X and is expected to pay around $100 per panel. There are also reports that Samsung is considering to slash the prices of the OLED panels to overcome the problem of production overcapacity.
Besides the low demand for iPhone X, Apple is also involved in legal battles. The company was recently slapped with a $502.6 million penalty to VirnetX Holding Corp. after the company lost a patent infringement lawsuit.
The verdict was announced by the grand jury in Texas after finding that Apple infringed patents that were related to secure communications, reports Bloomberg. The legal battle between the companies has been going on for past eight years.