Samsung reports weak demand for OLED displays used in iPhone X

Posted:
in iPhone edited April 26
Samsung Electronics reported positive quarterly profits on Wednesday, its fourth consecutive period of massive record gains, but warned of slow growth due to weaker than expected demand for smartphone OLED panels like those supplied to Apple for iPhone X.

iPhone X


According to Reuters, Samsung noted weakness in the overall smartphone market would slow earnings growth in the coming months.

"Generating overall earnings growth across the company will be a challenge due to weakness in the display panel segment and a decline in profitability in the mobile business amid rising competition in the high-end segment," the company said.

Alongside an industry-leading smartphone business, Samsung supplies components to competitors, the most notable being Apple. For its 2017 iPhone lineup, the Cupertino tech giant relied solely on Samsung for OLED panels that wound up in iPhone X.

Extrapolating from Samsung's quarterly statement, soft demand in the panel segment could be a harbinger of slower than expected iPhone X sales. Apple's flagship iPhone is the first to use OLED, though at least two models predicted to launch this year will feature the display technology.

Previous reports also cast doubt on iPhone X performance. Without citing sources, Nikkei in January claimed Apple cut production in half due to slow sales, a situation reiterated in a follow-up report a month later. At the time, the publication said the purported poor showing prompted Samsung to shop its OLED screens to other customers.

The Nikkei reports seemingly fly in the face of comments made by Apple CEO Tim Cook, who in February said iPhone X outsold both iPhone 8 and 8 Plus since its ship date in November. It has been suggested that reports of Apple's order cuts, if legitimate, were due to common seasonality.

Today's statement from Samsung adds another wrinkle to the ongoing iPhone X narrative. Earlier this month, AMS, an Austrian firm that supplies components for Apple's TrueDepth camera, issued a short-term guidance report warning of lower than expected revenue in quarter two due to a reduction in production orders. A second partner manufacturer, A-series chip producer TSMC, revised its full-year revenue target down $1 billion due in part to a declining mobile market.

Whether Samsung's revelation provides insight into Apple's handset sales remains to be seen, though circumstantial evidence of a slowdown in iPhone X sales is mounting.

Apple will have the opportunity to clear the air next week when it reports earnings for its second fiscal quarter of 2018. Though the company does not traditionally break out sales on a per-model basis, it does provide detail on overall iPhone performance.

Looking ahead, Apple is rumored to debut three new iPhones this year, two of which are likely to boast OLED panels manufactured by Samsung. Apple is supposedly looking to diversify its OLED supply chain in 2018 by bringing LG into the fold, but reported manufacturing snags put the display maker's participation in doubt.

Comments

  • Reply 1 of 17
    So samsung isn’t selling as many of the OLED screens because their own phones and other android devices arent as strongly demanded as anticipated. Funny how this article tries to point to iPhone X, which shouldn’t be as staring as launch window. It’s nearly time for new iPhones as it is. 
    olsfoljstmayjbdragonjony0watto_cobra
  • Reply 2 of 17
    foggyhillfoggyhill Posts: 4,663member
    You know who uses those panels the most... Well Samsung... And their phones are already on sale 30% only a few months after launch.

    Actually, Apple is now in a very good position to buy them from Samsung at a very good price since there is a manufacturing glut.

    I think Samsung overpriced them and thus most manufacturers stuck with LCD's
    brian greenolsaxcoatltmayjony0watto_cobra
  • Reply 3 of 17
    sflocalsflocal Posts: 4,095member
    iPhoneX sales are the best yet of any of Apple's iPhones.  So what this report actually means is that the crap Android phones using these displays are tanking and the media is making it sound like it's Apple's fault.

    I guess it was a slow day for the spin-crew, so might as well fabricate another iHating article.
    olsaxcoatljony0watto_cobra
  • Reply 4 of 17
    wonkothesanewonkothesane Posts: 1,169member
    I think the headline is misleading as it sounds like the only displays with lower deans are those used for the iPhone X. The word “also” would help to avoid this interpretation. 
    watto_cobra
  • Reply 5 of 17
    Android sales in Q1 2018 sank 8% yoy in China while iPhone sales grew 32% yoy in same period. http://www.patentlyapple.com/patently-apple/2018/04/chinas-smartphone-market-shrank-8-in-q1-2018-while-apples-iphone-sales-beat-the-trend-spectacularly.html May be the problem is with Android phones which thus far use a lot more OLED panels? Only the iPhone X uses OLED thus far. But the ramp up in the second half of year co-incides with the rumour of more iPhone models using OLED screens.
    watto_cobra
  • Reply 6 of 17
    Simple.  Business are buying iPhone 8 and 8+ instead of X.
    For the price of high quality OLED, Apple should stick to LCD and Micro LED.
  • Reply 7 of 17
    So samsung isn’t selling as many of the OLED screens because their own phones and other android devices arent as strongly demanded as anticipated. Funny how this article tries to point to iPhone X, which shouldn’t be as staring as launch window. It’s nearly time for new iPhones as it is. 


    I'd have to agree. Extrapolating the statement to say slow iPhone X sales is a stretch (which is exactly what extrapolating is, though!!). What percentage of the total OLED screens manufactured are for the X? How many other companies buy the screens?

    Samsung said that smartphone sales in general will be soft. Why are we singling out the X?

    axcoatlradarthekatwatto_cobra
  • Reply 8 of 17
    croprcropr Posts: 771member
    So samsung isn’t selling as many of the OLED screens because their own phones and other android devices arent as strongly demanded as anticipated.
    I've read the press release of Samsung and the reality is slightly different.  Samsung is not only making OLED displays for smartphones but also mobile chips.   The sales figures for the mobile chips remain strong while the sales figures for OLED displays are weakening.  This can only be if:
    •  the demand for smartphone models with Samsung OLED displays and with Samsung mobile chips is in line  with the expectation. 
    •  the demand for smartphone models with a Samsung OLED display but without Samsung mobile chips is not as anticipated.  
    Samsung models are in the former category.  The iPhone X is in the latter

    I am not saying  that there is 1 to 1 correlation between the weakening OLED figures and a possible weak iPhone X demand (there might be other models responsible for the weak OLED figures),  but your conclusion is definitely wrong



    muthuk_vanalingam
  • Reply 9 of 17
    asdasdasdasd Posts: 5,041member
    sflocal said:
    iPhoneX sales are the best yet of any of Apple's iPhones.  So what this report actually means is that the crap Android phones using these displays are tanking and the media is making it sound like it's Apple's fault.

    I guess it was a slow day for the spin-crew, so might as well fabricate another iHating article.
    I don't think that is true at all. Are you confusing sale with revenue?

  • Reply 10 of 17
    Rayz2016Rayz2016 Posts: 3,606member
    cropr said:
    So samsung isn’t selling as many of the OLED screens because their own phones and other android devices arent as strongly demanded as anticipated.
    I've read the press release of Samsung and the reality is slightly different.  Samsung is not only making OLED displays for smartphones but also mobile chips.   The sales figures for the mobile chips remain strong while the sales figures for OLED displays are weakening.  This can only be if:
    •  the demand for smartphone models with Samsung OLED displays and with Samsung mobile chips is in line  with the expectation. 
    •  the demand for smartphone models with a Samsung OLED display but without Samsung mobile chips is not as anticipated.  
    Samsung models are in the former category.  The iPhone X is in the latter

    I am not saying  that there is 1 to 1 correlation between the weakening OLED figures and a possible weak iPhone X demand (there might be other models responsible for the weak OLED figures),  but your conclusion is definitely wrong



    The article was talking about memory chips in particular, and the iPhoneX still uses Samsung memory. I’m not sure that TMSC makes all the processors, or shares the work with Samsung. 

    In in any case there is not enough information here to gauge whether the weakening in demand for Samsung’s OLED panels is because of the iPhoneX, since Samsung makes OLED panels for their phones and panels for monitors and TV sets. 
    watto_cobra
  • Reply 11 of 17
    GeorgeBMacGeorgeBMac Posts: 2,252member
    So... iPhone X is a failure in the market because it didn't sell as well as, say, the iPhone 6?    B U L L !

    Apple's marketing strategy changed substantially since the 6 was introduced as they began marketing older, cheaper phones much more strongly.   Even their newest base level device, the iPhone 8 was an "older, cheaper" design when compared to the iPhone X.

    Further, the iPhone X was never intended as a mainline, consumer grade phone.  It is a feature rich, bleeding edge device with a price to match.

    Actually, the failure was not that of the iPhone X.   It was in what Apple named it.  If they had chosen "iPhone Pro", volume expectations would have been more realistic from the get-go.  And, analysts would not be wailing and gnashing their teeth over its supposed failure in the market place.
    edited April 26 RonnnieOwatto_cobra
  • Reply 12 of 17
    Samsung says OLED demand is lower, but a market study says ASP for phones has seen significant growth. So do you choose to believe that Android phones with LCD screens are suddenly huge sellers at the high end, or that iPhone X is still doing well while other OLED phones are not? 
    watto_cobra
  • Reply 13 of 17
    rogifan_newrogifan_new Posts: 2,840member
    Who does Samsung supply OLED panels to besides themselves and Apple?
  • Reply 14 of 17
    avon b7avon b7 Posts: 2,206member
    So... iPhone X is a failure in the market because it didn't sell as well as, say, the iPhone 6?    B U L L !

    Apple's marketing strategy changed substantially since the 6 was introduced as they began marketing older, cheaper phones much more strongly.   Even their newest base level device, the iPhone 8 was an "older, cheaper" design when compared to the iPhone X.

    Further, the iPhone X was never intended as a mainline, consumer grade phone.  It is a feature rich, bleeding edge device with a price to match.

    Actually, the failure was not that of the iPhone X.   It was in what Apple named it.  If they had chosen "iPhone Pro", volume expectations would have been more realistic from the get-go.  And, analysts would not be wailing and gnashing their teeth over its supposed failure in the market place.
    All valid points.

    As an ultra-premium phone for an ultra premium market, by definition, most potential customers are priced out from the start. This should surprise no one. It isn't a problem as long as there are phones available to all potential users and the X sells in large enough numbers to make it worthwhile. From September last year, that is now largely the case for the first point. If they've sold a few million of the X the second case is justified too.

    What doesn't help is all the defensiveness around iPhone X sales. Some people here were counting their eggs before they hatched on one earnings call, pulling on their bell ropes proclaiming the X as a major success. Nobody rates the success of a company or phone on the back of just one quarter, much less when it is the company's strongest quarter of the year. We should be evaluating its success around November.

    Now, six months into the product cycle, another completely logical problem comes into play. If you had the money for an iPhone, you probably already have one. If you can afford one, but at a stretch, do you buy now or hold off until September? The only logical direction iPhone X sales should go, as a result, is down, but you were already selling to a fragment of your potential user base at the outset so the potential drop could be more marked.

    There is zero to worry about in that case (at least in iPhone X terms).

    The rest of the line of is bit of a mystery.

    All of Apple's current phones have been overtaken in many areas (even the iPhone X). Having just one major release cycle complicates things as Apple cannot react to market tendencies nearly as quickly. Hence the current situation. Virtually the entire industry has moved to 'full screen' phones on newest offerings while Apple just has one and it's the most expensive one.

    As phones draw level on major feature parity, things like design and price take on more importance. Apple is at a distinct disadvantage here. Unable to compete on price/design/dynamism. 

    There is definitely a case to be argued for for two major releases a year.

    On the stock front, I simply don't understand all the fretting. If you buy Apple (at current prices) as a short term investment, it is a foolish move if you jump in fright at every dip. If you buy as a long term investment, why worry about these (well documented) fluctuations in the first place? If you think Apple has legs for the long term, just sit back and relax.
    GeorgeBMacmuthuk_vanalingam
  • Reply 15 of 17
    cropr said:
    So samsung isn’t selling as many of the OLED screens because their own phones and other android devices arent as strongly demanded as anticipated.
    I've read the press release of Samsung and the reality is slightly different.  Samsung is not only making OLED displays for smartphones but also mobile chips.   The sales figures for the mobile chips remain strong while the sales figures for OLED displays are weakening.  This can only be if:
    •  the demand for smartphone models with Samsung OLED displays and with Samsung mobile chips is in line  with the expectation. 
    •  the demand for smartphone models with a Samsung OLED display but without Samsung mobile chips is not as anticipated.  
    Samsung models are in the former category.  The iPhone X is in the latter

    I am not saying  that there is 1 to 1 correlation between the weakening OLED figures and a possible weak iPhone X demand (there might be other models responsible for the weak OLED figures),  but your conclusion is definitely wrong



    If you had actually read Samsung's earnings statements you'd know that the company didn't report that OLED sales were down 3%.

    What it reported was that its entire Display Panels segment was down, and it specifically highlighted problems with both OLED and LED running into competitive pressures. 

    The only reason OLED was pulled out here was to create a BS story that could be laid on iPhone X.

    Also, Samsung doesn't just sell chips and displays for phones.  
    watto_cobra
  • Reply 16 of 17
    stevenozstevenoz Posts: 193member
    I don't think Apple did a good job in explaining to their buying base... why they should buy an OLED screen at a substantial add-on cost.

    My iPhone 7 Plus has a great screen. I don't think I need OLED.

    If I really do... why, Apple?

    Would the $200 be better spent elsewhere in my financially-deprived life?

    BTW, oh yeah, I'm an Apple Guy... but, just sayin'....
    watto_cobra
  • Reply 17 of 17
    GrenadehGrenadeh Posts: 1unconfirmed, member
    Yea no. The low demand is for a $1000 mid-generational iPhone 8 Plus knockoff masquerading as something new because it has an OLED. It has nothing to do with the OLED screen. Only the most rabid Apple fangirls want this device and that isn't really enough to justify the price tag, when a newer model is literally weeks away at any given time.
    edited May 25
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