Apple just announced its earnings results for the Christmas quarter, revealing that the company sold fewer phones than it did in the same quarter a year ago, but the average selling price increased considerably. That’s a clear sign that the iPhone X’s high price affected ASPs. And the iPhone X could have influenced the ASP in such a manner only if Apple sold a ton of them in November and December. That’s because Apple sold more than 77.3 million combined iPhone units during the quarter.
But a new report from Korea suggests that Apple is going to significantly cut iPhone X production in the March and June quarters this year. And Apple might stop manufacturing the iPhone X completely in the second half of the year.
Reports a few weeks ago said that Apple plans to discontinue the iPhone X when its replacements arrive in the late summer. This would mark the first since the iPhone 5 that a one-year-old iPhone isn’t kept in Apple’s lineup for at least one more year of sales. However, Business Korea now says that Samsung told partner firms that Apple will buy just 20 million OLED displays in the first quarter of the year, which represents a 50% decline in sales. The volume would be then halved again in the following quarter.
Unnamed industry sources apparently believe that Samsung’s disclosures imply that Apple is going to discontinue the iPhone X this year. Because Samsung is the only supplier of OLED panels for the iPhone X, Apple’s orders with Samsung Display reflect future iPhone X production.
Component makers are worried about the rate of decline in order quantities, which experts say are unusual. Apple is obviously expected to build fewer iPhones every year in the March and June quarters compared to the December period, but Business Korea suggests the order drop is significant this time around.
Samsung plans to offset the decline by selling more OLED panels to China-based smartphone makers, Business Korea says.
A report from Nikkei a few days ago mentioned the same 20 million and 40 million figures that Business Korea notes in its own story. But Nikkei did not single out Samsung Display. A different report said that Samsung is slashing OLED panel production at a plant making displays mostly for Apple by 10%, not 50%. Meanwhile, other Apple suppliers also went on record to say the drop in orders isn’t as big has been reported.
Apple is expected to release three iPhone X successors this fall. All of them will come with Face ID and all-screen designs, and OLED displays will be used in at least one new model.