Samsung Display has announced that it will cut its Apple OLED screen production in Q1, 2018 from 45-50 million units to 20 million after Apple cut its orders following disappointing iPhone X sales.
Nikkei Asian Review reported that Samsung has yet to decide its production target for the April-June period, but a further cutback may be in store. It built a dedicated facility to cater for Apple iPhone X and predicated its pricing based on Apple sales predictions.
Samsung’s announcement only concerns iPhone X screens – the production of screens for itself and other OEM partners remains unchanged.
Is the iPhone X a flop?
The iPhone X was the first iPhone to get a major design overhaul since the launch of the iPhone 6 in 2015, and Apple rightly expected blockbuster sales. The initial order to Foxconn that assemble the phone was around 40+ million units, and analysts say that over half that remains in warehouses around the world.
If that is the case how did Apple miss the mark?
GadgetGuy Val Quinn loves the iPhone X, “It is the most technologically advanced phone I have used,” although he is fond of the Samsung Galaxy Note 8 for its pen, LG V30+ and various other handsets.
So why hasn’t it set records?
GadgetGuy is not saying that it won’t break records – it may simply be the right product at the wrong, or ahead of, its time.
In brief, it has a 5.8”, 2436 x 1125 OLED screen (less the top notch), dual 12MP rear camera, FaceID (not fingerprint ID) with all the features you expect on a flagship (except microSD storage).
Analysts have offered many reasons.
Sky high price
At A$1579 for the 64GB version and $1829 for the 256GB version, it is Apple’s most expensive phone yet. The 5.5” iPhone 8 Plus starts at $1,229 and the 4.7” iPhone 8 starts at $1,079.
Apple does not disclose model sales, but technology analysts have reported that sales in 2017 of the 5.7” iPhone 7 Plus (from $1,049) and 4.7” iPhone 7 (from $849) exceeded the sales of the 8 series. That is logical given Apple introduces its new range in late Q3/Q4 each year but new app registrations still confirm sales of the cheaper handsets remain ahead.
Analysts say that although the 6/7/8 series are evolutions – more of the same – at least they are Apple products and fill the need for brand loyalists.
What the iPhone X did is help increase the average selling price of Apple iPhones. Its iPhone unit generated US$61.58 billion in revenue, up 13% from a year ago.
Those that bought iPhone 6/Plus or 7/Plus just are not ready to fork out $1500 especially if they bought them on subsidised Telco plans. They face up to $100 per month over 24 months extra for iPhone X handset costs on top of voice and data plans.