This actually fits nicely with the rumor Apple is restarting production of the X because it has a glut of OLED panels it was obligated to purchase from Samsung. If that rumor is true and Samsung had a guaranteed minimum number of panels Apple agreed to acquire then any slowdown in OLED iPhone sales wouldn't affect its revenue in an unanticipated major negative way. You wouldn't see the effects on Samsung's revenue until the after the contract was up for renewal as Apple couldn't cut it's order mid-cycle like it can with smaller suppliers.
I working in supply chains in high tech companies and I can tell you this did not happen. First, I do not believe Apple would ever agree to MOQ on any parts, even if they somehow agreed to this without knowing they could not hit it, this would have been negotiated away with the next product they sourced from Samsung. I never seen a situation where a company was force to take product which was not already made. Apple would not have allowed Samsung to continue producing parts knowing full well they plan to do something different in the future. So this does not pass the smell test.
This. Further, I find it ridiculous that Apple (with Tim Cook - master of the supply chain) could ever be so wrong about supply/demand that they would find themselves in a situation where they had a large surplus of any component.
Remember the story from earlier in 2017 about Samsung planning another OLED factory dedicated to panels for Apple's upcoming (2018) phones? Certainly sounds likely for Sammy to extract a commitment from Apple prior to obligating themselves to a $20B investment in plant in order to service them that without Apple they wouldn't need.. Why would anyone think Apple would NOT have to agree to a guaranteed minimum purchase in order to get Samsung to make the investment? It's simply good business, quid pro quo. Some of you guys must have blinders if you think it couldn't have happened.
Heck a few years ago I insisted on contractual minimums from a very good customer before adding a certain somewhat expensive piece of production equipment. That's what good businessmen do. You really think Apple could say "we'll probably buy 40 million OLED panels if you'll invest enough to build-em and and agree to sell to us for $X dollars a pop, but we're not promising exactly how many." Yeah, that's gonna happen LOL. Know how many times I've had a customer tell me something like "I'll be needing a thousand of these if you can design, set-up, and produce em for $10 each, but first I need just one make sure it's right".
This actually fits nicely with the rumor Apple is restarting production of the X because it has a glut of OLED panels it was obligated to purchase from Samsung. If that rumor is true and Samsung had a guaranteed minimum number of panels Apple agreed to acquire then any slowdown in OLED iPhone sales wouldn't affect its revenue in an unanticipated major negative way. You wouldn't see the effects on Samsung's revenue until the after the contract was up for renewal as Apple couldn't cut it's order mid-cycle like it can with smaller suppliers.
Rampant speculation based on "maybe this could be happening" guesswork is called conspiracy theory. It's easy to construct a narrative where parts of the story are designed to fit together with other rumors or conjecture.
It's not news or reality though.
It's not even clear that Apple ever stopped production of iPhone X. It only stopped selling it in the USA, to focus on its new models. In some other countries, it continued to be sold, the same way Apple kept selling the 6 long after ending its sales in USA.
When the same sources claim that Samsung was selling few OLEDs because iPhone X demand was weak come back in 6 months and say Apple had minimum quotas that are keeping Samsung afloat because iPhone demand is weak, that should tip you off that they are lying to promote a perpetual narrative that iPhone sales are weak, which is the opposite of every real point of data we have.
iPhones are selling for $800 next to $200 Androids, and sales figures were slightly up this year in a market where smartphones are shrinking. It's totally asinine to be creating new possible stories to explain how Apple is in a desperately bad position and that nobody wants iPhones.
From the article: "The only explanation is that it continues to benefit from a solid customer with strong sales, and Apple is by far the primary driver of the high-end, flexible OLED panels that Samsung credits for its component sales success."
I was simply pointing out that there is another possible explanation that has already been brought up that would call into question the assertion that Apple must have strong sales for Samsung's revenue to be what it is. Yes, it is speculation, but no more so than this article either.
Is it any less of a conspiracy theory to say "Samsung's sales are strong, therefore Apple's sales must be strong too"? It is still a "maybe this could be happening" guesswork that takes particular facts and uses them to fit a predetermined narrative.
none of the things you said are based on any verifiable facts.
On the other hand, we do know where high end flexible OLED panels come from, and we do know where they are sold in commercially significant quantities. There is no "maybe" conjecture.
The verifiable facts are multiple suppliers of iPhone components have issued revenue guidance warnings lately. It is no less speculative to attribute that to iPhone sales woes than it is to attribute Samsung's good revenue to positive iPhone sales. Neither Samsung nor the other suppliers have gone on record as to exactly what Apple's orders are, so any assumptions based on overall results/warnings are pure speculation on either side.
We know where face ID cameras come from (Lumentum which counts on apple for 30% of its revenue), that supplier issued a warning. We know where the audio chips come from (Cirrus which counts on Apple for 80% of its revenues), that supplier issued a warning.
These are not insignificant quantities of components provided to Apple.
Apple could be having poor iPhone sales or it could be having record iPhone sales, and there is verifiable information that can be used to form an opinion either way.
You said: "Neither Samsung nor the other suppliers have gone on record as to exactly what Apple's orders are, so any assumptions based on overall results/warnings are pure speculation on either side."
While I agree with you this is a verifiable fact, I must point out that you are missing the big elephant in the room here, namely 'the game of stock manipulation.' While I agree that both end of the spectrums are purely speculation, media and analysts often overplay the later and underplay the former to an extent that most readers don't know what's real and what's just a speculation.
Apple's largest supplier-- and the primary source of the flexible OLED panels used in iPhone X and the new iPhone XS lineup-- reported 24 percent year-over-year growth in its Q3 revenues from its semiconductors, memory, and display panel unit, an increase it attributed to "increasing demand for flexible [OLED] panels." That supplier was Samsung, and the "major customers" it credited clearly included the world's largest seller of high-end OLED phones. Why aren't Samsung's results attributed to being an "iPhone supplier"?...
...In April, Bloomberg was eager and quick to associate slow Q1 growth in Samsung's OLED unit to an imagined problem of "weak" sales of Apple's iPhone X. That was clearly not true.
Samsung's Q3 year to date DP (display) sales are unchanged from 2017 to 2018 at 23.3. While Q3 2018 was higher than Q3 2017 the Q2 2018 was much lower than Q2 2017 and they offset each other.
If the increase in Q3 2018 sales is because of Apple increasing orders then it makes sense that the Q2 2018 drop is due to Apple reducing orders, and Apple did stop making the iPhone X so that makes sense.
That DP revenue has not increased year to year even though Apple introduced two OLED phones this year to only one last year and those phones have bigger screens indicates that the number of screen ordered has fallen year to year as well.
Those other much smaller Apple suppliers surely would have been happier to have not announced lowered Q3 guidance. It's doubtful Bloomberg made them do it.
The high end smartphone market is mature and sales aren't going to continue to go up as steeply every year.
Apple began using Samsung flexible OLED panels at the launch of iPhone X. Other iPhones used Japan Display LCDs. In the first three quarters of 2017, Apple wasn't selling iPhone X. So why are you comparing "Samsung's Q3 year to date DP"?
Samsung DP lifted in Q3 2017 and surged again in Q3 2018. In between, Samsung DP was struggling with rivals over rigid OLED and LCD sales. According to Samsung itself, flexible OLED is where the valuable business/profits are. So every winter Samsung gets a huge boost, and in between it suffers. And it attributes IM suffering to the failure of its own flexible OLED Galaxy S9 phones. This isn't simple but it's also not very hard to work out what's going on.
Daniel Eran Dilger out there in full force again. You can always tell when Apple is in trouble when DED comes out with an apology piece with poorly researched nonsense.
Doom is coming any day, right? LOL, what bullshit. Apple is still kicking everybody's ass, as evident by their financials. Sorry that butthurts.
As for DED's piece, it's as well-reasoned and exceptional researched as always. Instead of simply whining, can you refute some of the points, providing sources that support your positions?
Comments
Heck a few years ago I insisted on contractual minimums from a very good customer before adding a certain somewhat expensive piece of production equipment. That's what good businessmen do. You really think Apple could say "we'll probably buy 40 million OLED panels if you'll invest enough to build-em and and agree to sell to us for $X dollars a pop, but we're not promising exactly how many." Yeah, that's gonna happen LOL. Know how many times I've had a customer tell me something like "I'll be needing a thousand of these if you can design, set-up, and produce em for $10 each, but first I need just one make sure it's right".
While I agree with you this is a verifiable fact, I must point out that you are missing the big elephant in the room here, namely 'the game of stock manipulation.' While I agree that both end of the spectrums are purely speculation, media and analysts often overplay the later and underplay the former to an extent that most readers don't know what's real and what's just a speculation.
Samsung DP lifted in Q3 2017 and surged again in Q3 2018. In between, Samsung DP was struggling with rivals over rigid OLED and LCD sales. According to Samsung itself, flexible OLED is where the valuable business/profits are. So every winter Samsung gets a huge boost, and in between it suffers. And it attributes IM suffering to the failure of its own flexible OLED Galaxy S9 phones. This isn't simple but it's also not very hard to work out what's going on.
As for DED's piece, it's as well-reasoned and exceptional researched as always. Instead of simply whining, can you refute some of the points, providing sources that support your positions?