Samsung Electronics will slash output of its organic light-emitting diode (OLED) panels in response to its customer Apple's decision to cut production of iPhone X amid weak demand, the Nikkei reported on Tuesday.
This follows another Nikkei report from last month that states Apple will halve its iPhone X production target for the first three months of 2018 to around 20 million units. For the facility dedicated to making panels for Apple, the rate will fall to 50 percent or lower. As well as the iPhone X, Apple also introduced the iPhone 8 and iPhone 8 Plus, which flank the OLED handset in terms of physical size.
KitGuru Says: While the iPhone X might be selling slower than expected, the $1000 price tag will keep it profitable over the course of the year.
Samsung Display is extending its marquee full-screen display design to mid-range smartphones as part of efforts to further improve profitability, according to industry sources on February 20. Unofficially dubbed the iPhone X Plus, the smartphone is believed to keep the overall design of the current model but increase in both physical and screen size, replacing the iPhone 8 Plus in the process.
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Frustrating the situation for Samsung may well be Apple's attempts to divide its supplier dependencies.
Samsung did not immediately respond to our request for comment and Nikkei's report did not cite specific sources.
To make matters worse, the Samsung display business is expected to see a year-on-year profit decline. The total average daily sales of iPhone 8 and iPhone X is 120 percent the sales of iPhone 7. For Apple, however, the focus is less on numbers of devices and more on the profit margin on each device.