Samsung Faces OLED Oversupply Over Weak iPhone X Sales: Report

Samsung Display is apparently facing an oversupply of smartphone OLED panels on account of Apple’s recent decision to decrease the production of its flagship iPhone model due to its lower-than-expected sales. According to recent reports, Samsung’s display division is now looking for potential outside clients in order to mitigate its losses, however, the adoption rate of OLED panels in general has been sluggish due to the fact that the technology is inherently more expensive than LCD solutions. This makes OLED a higher-end choice for smartphone manufacturers, and because the majority of phone makers in China are still heavily focused on mid-range devices, Samsung is apparently left with little options to deal with the matter.

According to latest reports, no more than ten-percent of smartphones manufactured by major Chinese OEMs including Vivo and OPPO have adopted OLED displays, while the rest of the devices in their portfolios continue to rely on LCD modules. Earlier predictions suggested that the OLED technology will experience a boost in popularity following the launch of the iPhone X but because Apple’s own flagship hasn’t sold as well as initially expected, smaller manufacturers aren’t as keen on switching to OLED displays either. While Apple was expecting to manufacture roughly 40 million iPhone X units in the first three months of its availability, that figure has reportedly been slashed in half due to sluggish sales. Last year, Samsung was expected to boost its profits thanks to iPhone X sales, and last April, it was reported that the company’s display division had signed a two-year OLED contract with the tech giant from Cupertino, estimated to be worth $9 billion. On the other hand, reports from late summer indicated that Samsung might charge Apple roughly $120 per OLED panel, or twice the cost of an LCD bearing similar characteristics, and this may have caused the retail price of the iPhone X to end up in the $1000 segment.

Because OLED displays cost about twice as much as LCD solutions, Samsung might find it difficult to offset its overproduction of OLED screens by finding smaller partners in China. On the other hand, as other display manufacturers including LG Display, Sharp, and Japan Display are gearing up for the production of OLED panels, prices of such modules could continue to drop in the next couple of years and OLEDs might eventually become more popular among lower-tiered smartphones. This would cause Samsung to lose some of its OLED market share and in order to combat this, the company is said to plan on maintaining its leadership through the development of next-gen flexible OLED displays designed for foldable mobile devices.

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