The iPhone X isn’t selling anywhere near as well as Samsung expected, and so OLED production must be cut back significantly.
The iPhone X was Apple’s big experiment last year alongside the more typical iPhone hardware refresh giving us the iPhone 8 and 8 Plus. The X introduced the notch, Face ID, and removed the Home button to allow for an all-display front.
What we ended up with is a handset that costs $370 to manufacture, but $1,000 to buy. So I’m sure it comes as little surprise to some of you that the iPhone X isn’t selling that well. In fact, sales are so poor Samsung Display is cutting OLED production significantly this year.
As the Nikkei Asian Review reports, Samsung invested $12.6 billion last year in anticipation of increased demand for Apple products following the iPhone X release. But that demand hasn’t appeared. Samsung setup a dedicated plant at its South Chungcheong site to produce OLED panels for Apple. The expected output was up to 50 million panels for the January to March quarter. That target has now been cut to just 20 million.
Earlier this month, BGR reported on a TrendForce research note which suggested that growth in the mobile market will remain weak for the whole of 2018. That accounts partially for why iPhone X sales have been weak. The note also stated Samsung remains the top smartphone vendor with Apple in second place. However, Apple will increase its market share by six percent this year.
With production being decided on a quarter-by-quarter basis, this downturn is likely to be short lived. Apple will once again refresh its smartphone line-up in the third quarter, which will inevitably see an increase in demand. A lot will depend on what exactly Apple decides to do with the iPhone X at that point.