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‘Dull’ iPhone X sales might be hurting Samsung as much as Apple

January 26th, 2018 at 12:18 PM
iPhone X Sales

The iPhone X was the best-selling smartphone in the December quarter according to some estimates, putting plenty of pressure on Apple’s competitors that launched high-end devices in the months leading to Christmas, including Samsung. The Korean company is in a tough position, however, having to compete against the phone while also hoping Apple sells as many units as possible since Samsung makes a killing on the OLED screens it supplies for the iPhone X. Now, it looks like the iPhone X might be hurting Samsung’s bottom line, especially if it’s not selling as well as predicted.

Early Galaxy S9 rumors said the iPhone X scared Samsung into launching the phone a lot earlier than expected. Later, we heard that Samsung decided to switch back to a March release since iPhone X sales did not hurt its Galaxy sales at all. Apple had also managed to meet iPhone X demand by Christmas, which meant Samsung could not take advantage of iPhone X stock shortages.

Since then, we’ve heard that iPhone X sales aren’t meeting estimates and Apple may soon cut orders from suppliers. A new report from ETNews, via The Investor, says Samsung won’t be spared. “Dull” iPhone X sales forced Samsung to lower the production of OLED screens at its A3 factory by 10% in January.

Samsung has much love for Apple, as the iPhone maker is its best smartphone parts customers. And it so happens that the OLED screen inside the iPhone X is a Samsung exclusive deal, worth an estimated $110 to Samsung for every iPhone X sold. Estimates last year said that Apple’s OLED orders for 2018 would add up to $22 billion in revenue for Samsung. That’s like selling 23 million Galaxy Note 8 phones.

The A3 line is designed mainly to service Apple. It’s able to produce 135,000 sixth-gen OLED panel units per month, 105,000 of which go to Apple.

“Samsung is reducing operation at the A3 plant largely due to the remaining investors for the iPhone X,” a source said. “The A3 plant is specially designed to supply panels to Apple only. Unless supplies to Apple do not recover in the coming months, it is unavoidable for Samsung to see weaker earnings this year,” a different person added.

Samsung has apparently put plans to expand its Vietnamese plant on hold “amid growing uncertainties regarding Apple’s OLED iPhone strategy.” Another thing Samsung has to worry about is competition. LG is rumored to be making OLED screens for 2018 iPhones, with a recent report saying that LG will be awarded orders for the 6.5-inch OLED iPhone model set to debut this year.

Chris Smith started writing about gadgets as a hobby, and before he knew it he was sharing his views on tech stuff with readers around the world. Whenever he's not writing about gadgets he miserably fails to stay away from them, although he desperately tries. But that's not necessarily a bad thing.

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