Apple rumored in talks with Samsung to lower OLED costs for 2018 iPhones

Apple is reportedly negotiating with Samsung Display to reduce what it pays for OLED panels, and as a result push down the prices for 2018 iPhones.

Apple is specifically seeking to drop the cost of a panel from $110 to $100, DigiTimes sources claimed on Tuesday. The people also suggested that the company could buy up to 100 million panels in 2018, with 25 million going into the iPhone X and the remainder being used for models due in the fall. About 50 million panels are said to have been bought in 2017.

The exact cost of the OLED panel used in the iPhone X has been a matter of debate, since neither Apple nor Samsung have shared the information. At one point it was estimated to be as much as $120 to $130, but some people have proposed $71 or even as little as $65.50.

Regardless, OLED is significantly more expensive than LCD, and Apple regularly tries to press suppliers for cheaper parts to keep profits up and shelf prices down.

Apple is expected to ship three new iPhones this fall: 5.8- and 6.5-inch OLED models, and a cheaper 6.1-inch LCD alternative. To make OLED the de facto option for shoppers, the company will likely have to sell the 5.8-inch model for less than the iPhone X's $999 — but Samsung is expected to remain Apple's exclusive OLED supplier for the near future, limiting how hard Apple can push.

RBC Capital Markets analyst Amit Daryanani recently proposed that the new 5.8-inch iPhone could start at $899, shifting the $999 pricetag to the 6.5-inch model. The LCD phone has been pegged anywhere between $550 and $799.

8 Comments

CobraGuy 76 comments · 7 Years

About 6 years ago

So Samsung expected to take a financial hit while Apple pads its $270 billion bank account.

Is this going to mean a cheaper phone?

Me thinks not.

Rayz2016 6957 comments · 8 Years

Mmm. I would’ve thought that the only way to get a discount is if they have another supplier to threaten them with.

Rayz2016 said:

Mmm. I would’ve thought that the only way to get a discount is if they have another supplier to threaten them with.

Well, LG seems to be having issues.

some other phone makers are using their OLED screens and pretty inferior to Samsung’s.

kind of odd as their TV size screens are excellent.

foggyhill 4767 comments · 10 Years

CobraGuy said:

So Samsung expected to take a financial hit while Apple pads its $270 billion bank account.

Is this going to mean a cheaper phone?

Me thinks not.

It's called negotiations, pissing off Apple now, means less memory orders, no SOC orders and Apple even has an
even bigger incentive in insuring your competitors are competitive by investing in their manufacturing.

This WILL impact yourability to make good margins on your own components in the future.

Also, if component costs are too high, Apple could just promote their LCD version of the device over the OLED one and price the later one a much higher price, which I expect they will be doing this fall, which will have a very big impact on volume and component order.

Asking the highest possible price for your component isn't always the best decision if you want to keep making good margins long term. Ask Qualcomm about it.
It is a balancing act.