Apple Seeking OLED Display Price Cut From Samsung Amid Rumors Next iPhone X Will Start at $899

[MacRumors]

Apple wants to reduce the price it pays Samsung for OLED displays used in current and future iPhone X models, according to DigiTimes.

The report, citing industry sources, claims Apple is requiring Samsung to lower its price to $100 per panel, down around 9.1 percent from the $110 that research firm IHS Markit estimated the iPhone maker paid in 2017.

Rather confusingly, the report first says Apple is negotiating with Samsung about the revised price, but later says it is a requirement.

If the price cut is indeed being forced upon Samsung, then Apple likely feels confident in its ability to secure OLED displays from LG as a second supplier, and is thereby benefitting from diversifying its supply chain and making its suppliers compete against each other on price in an effort to win millions of orders.

LG is widely considered to be ramping up its OLED display production capabilities in hopes of securing orders for Apple's next-generation iPhone lineup, but a recent report claimed mass production challenges have caused the company to fall behind schedule. It's unclear if those issues have been resolved.

Apple is expected to purchase up to 100 million OLED displays from Samsung in 2018, to be used for the current iPhone X, in addition to a second-generation iPhone X and so-called iPhone X Plus expected to launch in 2018.

Price cuts to the display and other components would help Apple lower its bill of materials for the iPhone X and future models, and the savings could potentially be passed on to customers. RBC Capital Markets analyst Amit Daryanani, for example, believes the second-generation iPhone X will start at $899, down from $999.

No doubt, Apple's own bottom line also stands to benefit from reduced production costs, so these negotiations are most likely par for the course.

Article Link: Apple Seeking OLED Display Price Cut From Samsung Amid Rumors Next iPhone X Will Start at $899

 

[gsmornot]

I'm seeking price cuts too.

 

[heov]

Hope they negotiate the deal. I doubt Samsung will pass on a 100mill order but we'll see. I'm sire LG is getting better and better.

I wonder how current X owners will feel if the new X has an A12 and lower price tag?

 

[Andres Cantu]

$899 sounds a lot better than $999, I hope that turns out to be true.

 

[DakotaGuy]

Why cut the retail price if sales are strong? I can understand wanting to get a better deal on displays from Samsung to increase margin, but a company should only cut prices if sales slow down. In Apple's case they could raise the price even higher and the brand is strong enough to sustain it. Tim Cook has been good at leveraging the brand in most cases, but a price cut does not maximize profit.

 

[MysteryMii215]

So does that mean that the rumored iPhone X (or whatever they're going to call it) Plus is going to begin at $999?

 

[Wags]

Why cut the retail price if sales are strong? I can understand wanting to get a better deal on displays from Samsung to increase margin, but a company should only cut prices if sales slow down. In Apple's case they could raise the price even higher and the brand is strong enough to sustain it. Tim Cook has been good at leveraging the brand in most cases, but a price cut does not maximize profit.

Apple has courage but asking $1249 for plus phone? Don’t believe all of any price cut goes right to consumers either.

 

[NexusUser]

Yeah, because Apple is well known for passing savings on to their customers

 

[manu chao]

Why cut the retail price if sales are strong? I can understand wanting to get a better deal on displays from Samsung to increase margin, but a company should only cut prices if sales slow down. In Apple's case they could raise the price even higher and the brand is strong enough to sustain it. Tim Cook has been good at leveraging the brand in most cases, but a price cut does not maximize profit.

It's not quite as simplistic. A price cut (not least one that is partly covered by lower component costs) that increases sales, can lead to higher profits, even if your current sales are steady.

Moreover, sales depend on the whole product lineup (and to lesser degree of that of the competition). If there is no iPhone 8s (and 8s Plus), keeping the iPhone X.2 at $999 leaves a hole in the pricing structure at the current price points of the 8 and 8 Plus (assuming the are kept in the line-up but get their price reduced by $100).
[doublepost=1524575888][/doublepost]

Yeah, because Apple is well known for passing savings on to their customers

Sure, they still charge $1000 for a 64 GB SSD as they did in the original MBA.

 

[Chupa Chupa]

Why cut the retail price if sales are strong?

Who said sales were "strong." Have not read that anywhere. Sales are decent enough for Apple to increase revenue, but only because X costs more. Everything I've been reading points to X sales having popped at launch then steep decline to current plateau. Some kind of value adjustment seems appropriate, either cut in price in added value in phone. Personally I think Apple got a tad greedy in how sold the X. I think it would have been a bigger hit if the entry level was 128GB, not 64. Apple played a game of chicken here and a lot of consumers put on the brakes not wanting to pay MacBook prices for a phone.

I bit because I was curious enough. I like my X but, honestly, is is worth the $1300 I paid. Nope. Anyone who thinks it is a fool. Apple has to find another way to increase revenue.

 

[EdT]

Not sure why Samsung would help their primary competitor. I’m also curious why news of this was released without ruffling feathers at either company.

$100 bucks is $100 bucks, but you still have a $1150.00 to $1200.00 dollar cost if you add Apple care, and even more if you also add other iPhone accessories so it’s not like this still isn’t expensive.

I’m curious why this story is being released now, and who really released it. Apple to set up Samsung as a price excuse? Samsung to set up Apple if the deal never happens?

Maybe I’m becoming too much of a conspiracy believer. I’m looking for hidden ulterior motives in everything now.

 

[Falhófnir]

$899 with up-to-date exchange rates and VAT = £765, if they price it at £799 I might actually be interested in sticking with iPhone... then again I would want at least 128gb storage so that’s at least another $150 (£120?) if storage tiers stay the same...

 

[DEMinSoCAL]

So, let me get this straight...Apple demands that Samsung make LESS profit on the OLED displays so that Apple doesn't have to make less profit because they choose to lower the price of the phone?

 

[now i see it]

The strangest bedfellow relationship of all time

Samsung paid Apple the $548 million in 2015, with $399 million of that total awarded to Apple for the design patent infringements. Samsung at the time argued that it was asked to pay a "disproportionate" sum for the design violation, and appealed to the Supreme Court to reduce that portion of the award

 

[Manzzle]

Would it kill Apple to open their own factory to just make displays overseas?

 

[dumastudetto]

Apple shouldn’t cut the price of the flagship device. Any savings should be invested in new innovations, R&D, and giving some money back to loyal investors.

 

[Chupa Chupa]

Yeah, because Apple is well known for passing savings on to their customers

But Apple is known for sticking with it's circa-33% hardware margins. So if it has a target MSRP for a product then it has to get the component prices in line to make those margins. Then, yes, it lowers the price to hopefully increase sales volume.

 

[Bswails]

The OLED screen is beautiful..however Apple can do more to iOS to make it worth the price..system wide dark mode would help..otherwise I’m on the fence about buying another OLED iPhone.

 

[manu chao]

So does that mean that the rumored iPhone X (or whatever they're going to call it) Plus is going to begin at $999?

I think that would make sense. One possible lineup could be (in parentheses, model occupying this price point currently):

$449: iPhone 7 (6s)
$549: iPhone 7 Plus (6s Plus)
$549: iPhone 8 (7)
$669: iPhone 8 Plus (7 Plus)
$699: - (8)
$799: iPhone 6.2" LCD (8 Plus)
$899: iPhone X.2 (-)
$999: iPhone X Plus (X)

 

[arkitect]

Would it kill Apple to open their own factory to just make displays overseas?

If their displays were not up to scratch *cough*, then it might very well "kill Apple".

 

[dumastudetto]

So, let me get this straight...Apple demands that Samsung make LESS profit on the OLED displays so that Apple doesn't have to make less profit because they choose to lower the price of the phone?

I hope these demands are not met so our next iPhones have less crappy Samsung components. The goal should be Samsung-less iPhones within a few years. Stop giving those rip off merchants our money.

 

[EdT]

So, let me get this straight...Apple demands that Samsung make LESS profit on the OLED displays so that Apple doesn't have to make less profit because they choose to lower the price of the phone?

I don’t know that your summation is true but if it is then it is something that most companies would try to do if they have the leverage. Not sure how successful Apple will be however. Samsung isn’t some small, reliant on Apple for business company.

 

[ugahairydawgs]

I wonder how current X owners will feel if the new X has an A12 and lower price tag?

Same way every person who buys a gen 1 product from Apple feels when the inevitable price drop comes.

Why cut the retail price if sales are strong? I can understand wanting to get a better deal on displays from Samsung to increase margin, but a company should only cut prices if sales slow down. In Apple's case they could raise the price even higher and the brand is strong enough to sustain it. Tim Cook has been good at leveraging the brand in most cases, but a price cut does not maximize profit.

They have to get the price down on the regular X at some point in order to make it so the X+ isn't over the moon expensive. They want people on the yearly upgrade and the more we get over $1k the more people start to second guess the utility of doing that.

Would it kill Apple to open their own factory to just make displays overseas?

Easy peasy, right?

 

[Chupa Chupa]

Apple shouldn’t cut the price of the flagship device. Any savings should be invested in new innovations, R&D, and giving some money back to loyal investors.

Right because Apple is cash poor and hurting for new R&D dollars. And, as an AAPL owner myself, we are don't own out of "loyalty." Stock ownership is not an emotional game. It's about making a good return. One doesn't own shares in a public company out of loyalty, friendship, belonging. It's not a club. As far as gains go we shareholders don't have that much to complain about even if the dividend is low. Certainly it's more than, say GOOG.

Apple wants to sell it's flagship product. If it's overpriced that's not happening. And that is not good for "loyal" shareholders.

 

[Falhófnir]

I hope these demands are not met so our next iPhones have less crappy Samsung components. The goal should be Samsung-less iPhones within a few years. Stop giving those rip off merchants our money.

Hope you’ll be satisfied with LG panels with less consistent characteristics (so a wider variance in quality) in your grands worth of smartphone then? No? Samsung are top of the pile for oled displays I’m afraid, if Apple want the best they have to pay for it and they can’t sit on Samsung like they can other smaller entities as there just aren’t the competitors they can go to that can produce the volume and quality they want.