Nikkei reported in January, that they were going to be cutting their production of the iPhone X in half for the quarter. A follow-up report a couple of days ago has indicated that Samsung is picking up the slack. Meaning, they are scrambling to figure out what to do with all these leftover displays. To be clear, this doesn’t mean that Samsung is picking up iPhone customers as a result of this production issue. What’s happening is that Apple was getting the iPhone X displays from Samsung, and due to a reduction in production, they are now planning to make far fewer displays for the iPhone X.
Because of this, Samsung shares have fallen as much as 2.3%. Other companies making OLED display components have also fallen. Originally, it was thought that production would be cut in half, but details are emerging that Apple’s future might not be looking that positive as they may be cutting more than half.
Samsung supplies OLED panels to Apple for its iPhone X as well as LCD screens for the iPhone 8 and iPhone 8 Plus. Apple kind of shot themselves in the foot with this one. Especially when it comes to the delay in releasing the phone. Why exactly? While people were waiting for the iPhone X, no one was buying other iPhones. If you had a 6 or a 7, you waited for the X. Not many people actually bought the 8s because why would you when the X was just around the corner? But that’s why Apple is in the predicament that they’re in.
I have kind of alluded to this lately, but maybe I need to say it outright. Apple shouldn’t have released three phones at one time. We all thought we were just getting the iPhone 8 (and plus) in September, but then suddenly we were told that an even better phone would be coming as well. Maybe a better marketing strategy would have been to wait until now, let’s say, to announce the phone and release it in the coming months. Apple would have benefitted from the sales of the iPhone 8, and then they could have picked up more sales from the X.
But that’s not how Apple releases products – and I get it. But the only thing that is getting hurt is the company due to the fact that their sales are kind of bad. Well, Apple and Samsung in this case. Here’s more bad news (kind of) – Apple is planning on releasing three phones in September. An updated version of the X, a Plus version of the X, and some other version that will be the “new” version. But haven’t they learned their lesson? Or do they think releasing all of them at once is going to make the situation better?
What does this mean for Samsung? It’s not great. Companies like LG Display and BOE will more than likely increase OLED production, which could put a strain on Samsung’s market share. That said, it doesn’t look like Apple is going to be ditching Samsung for some other partner, as they seem to be the only ones who can produce this kind of quality and quantity that Apple needs. Stay tuned on this one, as it could get really interesting.