Apple Set To Pay Samsung Hundreds Of Millions After Sales Shortfall Of iPhones
Samsung’s display division is set to reap millions in compensation from Apple following a shortfall in OLED panel orders for the Companies iPhones.
This is not the first time that Apple has ended up failing to deliver volume for their products from suppliers of parts for their devices.
Samsung who makes a big percentage of the parts in an Apple iPhone and is the sole supplier of a 5.4-inch panel for the iPhone 12 mini, the smallest model of Apple’s 5G-supporting iPhone 12 series was paid an estimated A$898 million in 2019 and A$1.3 billion in 2020 because of Apple’s miscalculation on how many iPhones they would sell.
Samsung Display’s small OLED shipments in January dropped 9 percent month-to-month to 45 million units, according to market researcher Omdia. This was attributed to a slowdown in demand for Apple iPhones in particular their 1Phone 12 mini.
ChannelNews understands that Apple has recently adjusted target production of the iPhone 12 series to 75 million units for the first half of this year, which is about 20 percent down from its previous target, with the iPhone 12 mini responsible for the majority of the cuts.
“It is uncertain whether Apple would pay a penalty to Samsung Display, but considering its contract history and sluggish sales of the iPhone 12 mini, it is likely that Apple will compensate Samsung Display,” an industry official said on condition of anonymity.
Samsung Display, an affiliate of Samsung Electronics Co., has been the world’s leading smartphone panel vendor while dominating the supply of displays for Apple’s iPhones.
According to Omdia, global OLED panel shipments reached 53 million units in January, and Samsung Display accounted for 85 percent of them.