With Apple Reducing iPhone X Production, Samsung Forced to Look for OLED Panel Buyers

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A reduction in iPhone X orders from Apple has left Samsung scrambling to find new OLED buyers as the Korean company is now potentially looking at an excess stock of the panels. Samsung had to ramp up its OLED display panel production before the launch of the iPhone X to meet its high demand. The company was the sole supplier of OLED panels to Apple for the iPhone X last year.

Samsung had hoped that Apple’s switch to OLED panels will make other OEMs in the market also follow suit. However, that has now happened and Samsung is now stuck with an excess production capacity which has forced it to look for new buyers.

The report also cites that Apple is cutting down the sales of the iPhone X by half in Q1, 2018 due to sluggish sales. This is not the first time we are hearing this. However, one must keep in mind that Apple always reduces production of its flagship iPhone in the quarter after the holiday season due to weakening demand.

“Samsung is increasingly selling OLED panels to outside clients,” said an official at an electronics trading company in Tokyo. Production of the iPhone X, whose sales have been sluggish, is expected to drop by half in the first three months of this year from the initial estimate of over 40 million units.

The report claims that an OLED panel from Samsung costs over $100 which is far too expensive for most OEMs to bear. This is why they have stuck to using LCD panels on their devices which usually costs around $40. With such a high price, it is not possible for OEMs of mid-range smartphones to use an OLED panel on it as it would lead to a dramatic increase in their price.

Samsung currently dominates the OLED market with a market share of over 95 percent. However, the company will face stiff competition from Chinese OEM BOE and LG Display which are setting up their own OLED production lines.

Our Take

Apple is also looking to launch at least two new iPhone models in 2018 that will make use of OLED panels. This should lead to a further increase in OLED adoption among other OEMs as well. And with an excess production capacity, Samsung might just have to reduce the price of its OLED panels to find new buyers.

[Via Nikkei]