A report described Apple’s efforts to build a second source for OLED screens as both a struggle and the reason as to why iPhone X carries a premium price.
The inability of LG to match Samsung in OLED competency is well learned. In the last fall, Google launched two Pixel 2 models, one from LG with an LG display and the other from HTC with a Samsung display. Both showed serious OLED screen problems, but the LG “XL” model was immensely bad. However, Google shipped it. The sales of both the models were terrible. None in the media seemed to care, and if anything, made excuses for Google that shipped an inferior, faulty product with a high price tag.
Now that Apple is scrutinizing LG as a potential OLED supplier, the inability of LG to master OLED displays on the same level as Samsung has been recast as a big problem for iPhones, despite the fact that Apple already shipped iPhone X to huge success using just a single OLED supplier to ensure superior quality output.
As per the report, LG supposedly was tasked with developing the displays for around “20 percent of the future iPhone models” and Samsung was entrusted upon for the remaining 80 percent. In reality, Apple continuously makes amendments to its suppliers on the basis of capacity, cost, and competence, and in aggregation with changes in the demand across various regions globally.
The rumors of a supply cut with one supplier cannot accurately be interpreted, as a history of untrue predictions by channel check analysts have demonstrated over the last decade.
The report even stated that Apple’s single source for the OLED screens logically would give Samsung a higher pricing power, another obvious fact that has played out in the other areas, involving memory and the other components where Samsung holds the pricing power because of a lack of strong competition.
However, analysts said that it even went out on a limb in stating that the control of Samsung of the OLED market was a reason for the iPhone X’s steep 999 dollars price tag, before adding the original conjecture that, the cost turned off some consumers, resulting in demand to fall short of expectations and compelling Apple to cut orders for parts.
That conclusion is entirely based on the media narrative which claims that Apple expected to design 40 million more iPhone X units in the March quarter than it did, a wildly implausible idea that Japan reports kept passing back and forth as the reason why the iPhone X was selling so poorly, even as the new model gobbled up nearly a third of all profits as the best selling smartphone model.
The reports also said that the high cost of the iPhone X was pinching sales, despite the fact that the demand for the new model pushed up dramatically “Apple’s iPhone Average Selling Price.” If a statically crucial number of purchasers were against paying any premium for the new models, the ASP obviously would not have changed. That is how math works and claiming the opposite is just an untrue asset.