Published in News

Apple insists suppliers sacrifice their profits

by on24 April 2018

The needs of Apple are more important than suppliers. 

There is evidence that Apple is leaning on its suppliers to give it more discounts to push up its margins to keep the company looking like it is making significant money with fewer sales. 

DigiTimes is reporting that Apple is re-negotiating with  Samsung Display for a reduction of the price of OLED panels. DigiTimes thinks that Apple wants to lower the price of OLED screens because they were responsible for the high price of the iPhone X which made it sell poorly. However, this is a little naive as the unit costs of production, even with the higher priced OLED screen was only $370.25 and yet Apple chose to flog it for over $1,000.  In contrast, Samsung's Galaxy S8 with 64GB of storage costs $302 in materials and retails at around $720.

Apple requires the Korea display vendor to lower the unit price of its OLED panels to $100, down from $110 in 2017.  Samsung Display might agree on the basis that Apple will buy 100 million of the things, so the lost of 10 percent is probably livable.  A ten dollar reduction is probably not going to change the price of the coming iPhone either – it will just prop up Apple's margins.

Prices of smartphone-used OLED panels are likely to go down soon as OLED panel makers in China are likely to cut their prices to keep their production lines running.



Last modified on 24 April 2018
Rate this item
(0 votes)

Read more about: