Weak iPhone X Sales Could Also Be Hurting Samsung

Countless reports have emerged suggesting that Apple’s iPhone X is struggling to gain momentum among consumers and that sales are weak. But the American tech giant isn’t the only firm being affected by disappointing sales of the handset.

Samsung, which produces display panels for the handset, may also fall victim to this epidemic.

According to a report from Nikkei, it’s believed that Samsung is currently looking for more companies to buy into its organic light-emitting diode technology amid fears that Apple may slow down orders.

These panels aren’t exactly cheap, and many companies are using liquid crystal displays as an alternative to cut costs. Of course, the iPhone X does cost a hefty $1000. And clearly, during the design phases, the firm thought it could make the money back on the screens as a result of large profit margins.

An official at Samsung told Nikkei that the firm has been looking to drive up profits by flogging its display technologies to third-party manufacturers. “Samsung is increasingly selling OLED panels to outside clients,” they said.

Essentially, Apple approached its South Korean competitor to order a large bulk of OLED panels, which led it to increase production. But sales of the iPhone X haven’t exactly gone to plan.

Now, it’s thought that Samsung has a large amount of OLED panels left hanging about the production line. So it could end up losing money if orders don’t start to pour in.

On average, these displays cost more than $100, which is nearly 50 percent more than the price of LCD alternatives. Most smartphone manufacturers opt for the latter.

Speaking to Nikkei, IHS Markit financial services specialist Hiroshi Hayase said investing in OLED panels “makes it difficult to compete with rivals on price”.

In January, leading Wall Street analyst firm Longbow Research predicted that Apple will sell less iPhones in 2018 than previously thought.

He cited the expense of the iPhone X and battery throttling debacle as being two factors that may put off consumers from buying Apple’s smartphones.

“Apple found iPhone price elasticity with the introduction of the X blunting some demand. Reception of the iPhone 8/8Plus was lukewarm with Apple shifting production back toward the iPhone 7 as a result,” he said.

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