Samsung has an oversupply of OLED panels as rumors indicate the iPhone X is selling poorly. The company is hunting for new buyers, a new report said.
The supply glut was supposedly caused by the Korean tech company's earlier decision to ramp up the production of organic light-emitting diode panels for the 2017 Apple flagship phone. However, the handset apparently did not excite in the same way as the previous iPhone releases and Apple reportedly cut down both on production and OLED orders.
As a result, Samsung now faces "excess production capacity," also brought about by Android device makers' slow transition from LCD to OLED. The problem underscores an over-projection on the company's part that it is now "casting about for new customers," Nikkei reported.
"Samsung is increasingly selling OLED panels to outside clients," the Japanese publication reported.
Bleak OLED Prospects
Adding to the company's woes is the expanding OLED panel production as Chinese and South Korean industry rivals step up on efforts to flood the market with the material. Nikkei said competitors such as BOE Technology Group, Tianma Microelectronics, and LG Display have been firing up OLED production facilities in quick successions, which likely will heat up the pricing competition.
The China-based OLED makers, for instance can produce the panels with greater speed and still sell them at lower market price, giving further headaches to Samsung.
Already facing the prospect of significantly shaved off profits, the company can only hope that device makers other than Apple will soon make the jump to OLED. However, with the cost of using OLED over LCD still relatively expensive, midrange brands like Oppo and Vivo are unlikely to switch if only to keep selling handsets at affordable price points, Nikkei said on its report.
The iPhone X Factor
One thing that could shore up Samsung is for the iPhone X to pick up on sale as every unit of the device that flies off the shelves would translate to profits for the Korean manufacturer. Estimates indicate that for each iPhone X assembled, Apple pays up to $120 for the OLED panel that Samsung exclusively delivers.
Oddly though, the iPhone X sales falling behind expectations is hardly supported by facts, at least if the basis is the recent earnings report issued by Apple. The company, through Apple CEO Tim Cook, has maintained that the iPhone X dominated the sales charts since it started shipping in November 2017.
The company's claim was backed by its latest quarterly results that pointed to the iPhone X as the biggest revenue generator of the 2017 lineup. If indeed the handset model is doing well as Cook has insisted, then Samsung's OLED-related problems could have been caused by a variety of other market factors, AppleInsider suggested in a related report.
