The request for price reductions comes as no surprise to the industry as the OLED panel accounts for about one-third of the total production cost of an iPhone X and has been pinpointed as a key factor contributing to the lackluster sales of Apple’s first OLED model, said the sources.
Apple’s negotiating position appears to have both strengths and weaknesses at present …
On the plus side, Apple would be offering Samsung much higher production volumes, says the Digitimes report.
Apple is likely to purchase up to 100 million OLED panels from Samsung Display in 2018, with 25 million to be used by the current iPhone X and the remaining 75 million for the next-generation OLED models to be launched in 2018 – one being a 5.8-inch model and another a 6.5-inch one, indicated the sources.
On the downside, Apple’s plans to make two rival suppliers bid for the business seems to have hit a snag. The company had originally planned to split OLED orders for this year’s iPhones between Samsung and LG, but a recent report suggests that LG is struggling to hit production targets. The WSJ report said that it was uncertain whether LG would even be in a position to be a minority supplier this year.
There have been relatively wide-ranging estimates of the sum Apple pays to Samsung for each iPhone X display. Today’s report says that Apple is seeking a reduction from $110 to $100.
Apple is expected to launch three new iPhones this year:
- A successor to the 5.8-inch iPhone X
- A 6.5-inch ‘iPhone X Plus’
- A cheaper 6.1-inch model with a similar design but LCD screen