The high cost of parts is one reason the latest iPhone X is priced at a relatively high $999 or more. As Apple chose to shake hands with Samsung, to provide OLED displays for iPhone X. And Samsung made it happen, meeting all the production requirements of the Cupertino giant.
Samsung smartphones maintained their dominant market status late past year as Apple iPhones expanded their presence in South Korea, an industry report said on Monday. Given Samsung's dominant position in the market, it's the only company that could provide Apple with OLED panels in the quality and quantity that the company desired, which is why it's the sole supplier of the iPhone X's OLED display. The report explains that Samsung initially ramped up production to meet demand for the iPhone X, but now faces excess capacity as Apple reportedly cuts the device's production...
According to the report, a Samsung OLED panel for a smartphone sells for around $100 - with the touch sensors included. Production of the iPhone X, whose sales have been sluggish, is expected to drop by half in the first three months of this year from the initial estimate of over 40 million units.
The report claims that Samsung enhanced its capacity of production of OLED display panels, considering the amount of business, it was supposed to get after making deal with Apple.
Manufacturers have elected to stick with cheaper LCD units, however, which Samsung also manufacturers and sells for almost half the price of its OLED panels. For example, only 5% to 10% of the handsets made by leading Chinese manufacturers Oppo and Vivo employ an OLED screen.
Samsung has reportedly been left saddled with supplies and it doesn't help that there are still many smartphone manufacturers that have yet to make the switch to OLED. Given the overcapacity, "the price of rigid-type panels on glass substrates has been falling", said Yoshio Tamura, head of DSCC's Asian operations.