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Reuters: Apple paid Samsung $684 million for unrealized iPhone OLED screen sales

July 5th, 2019 at 6:50 AM
iPhone XS Sales

Since Apple started the transition to OLED screens for the iPhone, we’ve been hearing reports that Apple kept cutting orders for Samsung, its biggest supplier for the iPhone X and iPhone XS models, as a result of weaker than expected sales. A story from Korea said a few days ago that Samsung has been seeking compensation from Apple for unrealized OLED display sales for the iPhone. Now we have an idea of how much Apple has agreed to pay its supplier, although the extra cash will not help with Samsung’s disastrous quarter.

Samsung released its profit guidance for the second quarter of the year, forecasting a massive loss for the period. That’s a direct result from the US-China trade war, Reuters reported, which impacted the global chip and smartphone markets.

The report notes that one-off gains helped Samsung beat expectations and that they’re related to Apple.

Samsung expects operating profit to drop 56% in the June quarter, down to 6.5 trillion won ($5.6 billion), with revenue falling 4.2% to 56 trillion won from the year-ago quarter.

Samsung received reimbursement amounting to about 800 billion won for displays sold to Apple. Reuters says, as Apple missed the sales target. That amounts to $684 million. To put that number in perspective, that’s how much money Apple would make from selling nearly one million iPhones with an average selling price of around $722 — the ASP comes from Above Avalon’s Neil Cybart’s estimates from mid-May. The iPhone XR, Apple’s only 2018 iPhone with an LCD screen, sold better than the iPhone XS handsets since the three devices launched, reports have claimed.

Samsung has not explained the “one-time gain related to the display business,” which is itself just a footnote in the company’s brief press release — Apple’s name isn’t even mentioned. Also, it’s unclear what sales target Apple and Samsung agreed on, and what Apple ended up buying.

Apple’s new iPhones come out in September, with two of them supposed to feature OLED screens, while a third will come with an LCD panel. Samsung, meanwhile, will launch the Galaxy Note 10 early next month.

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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