After paying quite a premium to Samsung for the 5.8-inch OLED panel it used on the iPhone X, Apple wants the Korean company to reduce the price it pays for its OLED panel. The DigiTimes report claims that Apple wants to lower the production cost of future iPhones so as to ramp up sales of its OLED models.
Apple reportedly paid Samsung around $110 per OLED panel for the iPhone X. This made it among the most expensive components of the handset and played a key role in pushing its price tag to $999. This time around though, Apple wants Samsung to reduce the panel price to US$100.
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 is planning on purchasing around 100 million OLED panels from Samsung this year. Out of this, the company will use around 25 million on its existing iPhone X, while the remaining 75 million units would be used on the 2018 5.8-inch iPhone X and 6.5-inch iPhone X Plus. Apple is also working on a 6.1-inch iPhone with an LCD panel, with a reported price tag of around $550.
Apple was keen on using OLED panels from LG on at least one of its iPhones due to be launched this year. However, LG Display has met with some production issues which is why the Cupertino company is likely to skip using panels from LG on its devices this year as well. This will force Apple to once again solely rely on Samsung for OLED panels.
However, given that it is such a huge customer for the Korean company, the latter will likely end up accepting its demands and lower the prices of its OLED panels this year. By reducing the overall BOM, Apple could price the iPhone X lower than $999. This would allow the company to make room for the bigger and more expensive iPhone X Plus in its lineup as well.