Apple Reimbursed Samsung $683 Million After Missing OLED Display Targets

[MacRumors]

Apple reimbursed Samsung 800 billion won ($683 million) to cover the cost of OLED panels after Apple missed a sales target both companies had agreed upon.

Apple originally said it would buy a certain number of the display panels from the South Korean company, but disappointing iPhone sales meant it was unable to live up to the agreement. The payment was made in the second quarter of this year.

The figure, quoted by Reuters, came as Samsung on Friday forecast a plunge in its second-quarter operating profits, but one-off gains like the payment from Apple helped it beat analyst expectations.

Samsung's April-June operating profit likely fell 56 percent to 6.5 trillion won ($5.6 billion), the company revealed in a regulatory filing ahead of the release of its detailed earnings figures in late July. Revenue probably fell 4.2 percent from a year earlier to 56 trillion won ($48 billion).

Samsung is on track to post year-on-year profit declines for a third consecutive quarter, mainly due to a combination of falling chip prices because of a supply glut and U.S. sanctions on Chinese telecom equipment maker Huawei, which has become a key Samsung client.

The U.S.-China trade war is also impacting global chip and smartphone markets, with rising tariffs hitting demand for electronics. In a striking example of the ongoing feud between the two countries, Seoul also cut its annual economic growth target to a seven-year low as exports continued to slump.

Article Link: Apple Reimbursed Samsung $683 Million After Missing OLED Display Targets

 

[LK LAW]

I do hope that's million and not billion

 

[zunamo]

I do hope that's million and not billion

WON not USD

 

[timmyh]

I do hope that's million and not billion

Correct. My error, sorry. It should have read $683 million. Title updated.

 

[EugW]

Drop the prices, Apple.

 

[allenvanhellen]

Make an OLED all-screen iPhone 4S-sized device. Problem solved. Bonus sales for headphone jacks and squarish edges (or maybe iPod Touch thinness).

 

[aneftp]

Make an OLED all-screen iPhone 4S-sized device. Problem solved. Bonus sales for headphone jacks and squarish edges (or maybe iPod Touch thinness).

And they would still charge u $900 for it. Would u pay $900 for 4 inch oled iphone

 

[Grey Area]

And they would still charge u $900 for it. Would u pay $900 for 4 inch oled iphone

I would.

 

[EldonChew]

Ouch that must have hurt even Apple

 

[EugW]

Ouch that must have hurt even Apple

They deserve it. Their OLED iPhone pricing is just ridiculous.

 

[ksec]

So the order and renegotiation did not go well? And Apple had to paid for for fine?

If we assume $80 for the OLED panel, that is 8.5M Unit Shipment missing. And we don't know if this is a one time penalty with a new deal, or the total since iPhone X.

They deserve it. Their OLED iPhone pricing is just ridiculous.

Again I would like to emphasis on value. It is not that many cant afford $1099, you can spread it out for 24 or even 36 months if it had to. It is the value proposition has been comparatively declining.

If Apple had an Solid Battery iPhone that gets me double the capacity, I am pretty sure it would sell like hotcakes even it it starts at $1099.

 

[aneftp]

I would.

Maybe you will. And most if they buy it will try to keep the phone for 4 plus years or until it dies.

The thing about raising prices is people tend to hold onto the phones longer and longer. The techies like many of us including me buy every year. But now. Many of us techies hold on to the phone for 2 years.

The average consumer used to buy every 2 years. At least in the USA when it was subsidized $199 pricing. (Msrp $650). And no. Many of the USA post paid plans are not cheaper with the equipment installment plans separated from main phone bills. Cause many people cross upgrade and kept flip phones for their grandparents. And didn’t have to pay data plans for those cross upgrades $199.

So the average consumer keeps their smart phones 3-4 plus years now. I know so many people still on iPhone 6S. That’s sept 2015 phone. Apple isn’t making money when people hold onto phones.

 

[otternonsense]

The expected outcome of Tim’s greedy pricing and industrial design stalemate. Try harder, Apple.

 

[Jsameds]

Apple isn’t making money when people hold onto phones.

Which is why they're pushing services rather than dropping handset prices.

 

[Sandstorm]

Good. And I hope their (Timmy & Co) obscene greed backfires even more over time.

 

[ksec]

So the average consumer keeps their smart phones 3-4 plus years now. I know so many people still on iPhone 6S. That’s sept 2015 phone. Apple isn’t making money when people hold onto phones.

Again the value proposition. If someone is on iPhone 6s or 7, and 90% or even 100% of their daily routine is normal Social Media and Instant Messaging, it simply doesn't make sense to buy iPhone XS or XR for $749 / $999. It is not that they cant afford it, but they don't see the value of it.

That is me on iPhone 6s, my girlfriend changes phone every 2 year on contract, and she is now thinking of not doing so in the next circle. For many, they are only changing their phones when it broke.

I just hope this year the iPhone 8 gets down to $499 and $599.
[doublepost=1562326876][/doublepost]

Which is why they're pushing services rather than dropping handset devices.

Again this doesn't make much sense to me, these Services don't have the same margin as Apple's Hardware sales currently operate on.

 

[aneftp]

Again the value proposition. If someone is on iPhone 6s or 7, and 90% or even 100% of their daily routine is normal Social Media and Instant Messaging, it simply doesn't make sense to buy iPhone XS or XR for $749 / $999. It is not that they cant afford it, but they don't see the value of it.

That is me on iPhone 6s, my girlfriend changes phone every 2 year on contract, and she is now thinking of not doing so in the next circle. For many, they are only changing their phones when it broke.

I just hope this year the iPhone 8 gets down to $499 and $599.
[doublepost=1562326876][/doublepost]

Again this doesn't make much sense to me, these Services don't have the same margin as Apple's Hardware sales currently operate on.

Agree. My colleague 2 income working professional family. Money isn’t a factor. She’s happy with her iPhone 6. She got her iPhone 6 battery replaced last year under the $29 battery program and she keep trucking along with her phone.

Though I am tempting her when I show her night sight pics of my pixel 3 xl and daylight pics of my iPhone XS max

 

[Heineken]

Drop the prices, Apple.

I was thinking to buy a new iPhone in September but based on current pricing I can’t justify it. **** it.

 

[ksec]

Agree. My colleague 2 income working professional family. Money isn’t a factor. She’s happy with her iPhone 6. She got her iPhone 6 battery replaced last year under the $29 battery program and she keep trucking along with her phone.

Though I am tempting her when I show her night sight pics of my pixel 3 xl and daylight pics of my iPhone XS max

Agree as well. The camera is the biggest thing. There was an interesting conversation in dinner a while ago with my friends and colleagues, they don't really think the photos taken by iPhone 7 , iPhone X were *poor* by any standard, it is just that when you compare to some other Android Phones, such as the Pixel and Huawei they felt they were "missing out" by using iPhone. ( Not to mention they are cheaper )

I know this year's iPhone are rumoured to be big on Camera, hopefully Apple has some surprise in that.

 

[Adam Warlock]

I know this year's iPhone are rumoured to be big on Camera,

Certainly they won't be big on battery life or low on price, which is what the vast, vast majority of customers want.

hopefully Apple has some surprise in that.

Hope springs eternal, but unfortunately Tim Apple has no history of surprising customers in any good way. :-\

 

[bladerunner2000]

Ouch that must have hurt even Apple

Their pride, yes.

Deservingly.

 

[Totemsflare]

I agree on the “people are holding on to their phones”. I got my 6S when it came out. Replaced the battery last December and feel no need to get a new phone until this one breaks. I do secretly wish for it to stop functioning but no luck.

 

[NBAasDOGG]

Apple under Tim Cook pays millions fine to Samsung, but but does not give you OLED in all of their devices!

 

[User 6502]

Good, maybe they’ll price them more sensibly next time round. And maybe they’ll start to innovate again, rather than recycling the same design for 3+ years.

 

[genovelle]

Agree as well. The camera is the biggest thing. There was an interesting conversation in dinner a while ago with my friends and colleagues, they don't really think the photos taken by iPhone 7 , iPhone X were *poor* by any standard, it is just that when you compare to some other Android Phones, such as the Pixel and Huawei they felt they were "missing out" by using iPhone. ( Not to mention they are cheaper )

I know this year's iPhone are rumoured to be big on Camera, hopefully Apple has some surprise in that.

I wonder why those Pixel are not topping the sales charts if they are so great. They should be generating lines at Best Buy and a 3 month wait to here some tell it. It is doing neither