iPhone sales are sliding and it's not just hurting Apple but Samsung too

• Falling sales of iPhones has left the South Korean manufacturer, Samsung, with an OLED display that it can’t offload.
• Apple placed an order for 100 million panels but didn’t sell nearly enough iPhones.
• The panels are now lying in Samsung warehouses with nowhere to go and the company wants to penalise Apple for creating the excess supply.

If falling iPhone sales weren’t bad enough, Apple could now be sued by Samsung for failing to reach its sales targets.

iPhones use OLED panels that are manufactured by the South Korean giant. And, Apple placed an order for 100 million OLED panels for its iPhone XS, XS Max and X.

After the mega order, sales were nowhere near expectations and subsequently those OLED panels are lying unused in Samsung warehouses.

Industry insiders told etnews, a Korean publication, that Samsung and Apple have already held multiple consultations to resolve the issue but have been unable to find a way out.

Where does the excess supply go?

One would think that Samsung would simply sell the excess OLED panels to another company. But that’s not really an option. The panels are patented and ‘Apple-exclusive’. In fact, Apple insisted that Samsung use an exclusive manufacturing facility to manufacture iPhone displays.

After the no-show, Samsung Display’s operating profits were cut in half from 5.7 trillion won in 2017 to 2.6 trillion won in 2018.

Which, brings us to Samsung’s current predicament. The company is considering legal action on Apple for “hundreds of billions of won”, which is essentially hundreds of millions of US Dollars.

No matter how you slice the Apple

Apple is looking for a way to get out of this mess without having to pay up. The company offered to cover the losses by ordering product panels for its other products, such as tablets and notebooks according to industry officials who spoke to etnews.

Experts say that it’s rare for a panel maker to actually penalise a consumer.

Though Apple and Samsung are known to the world as competitors, two of the biggest smartphone manufacturers in the world are actually business partners. But that partnership too is turning sour as Apple’s problems are now becoming Samsung’s problems as well.

Should the matter actually come down to a fine, it would be around $90 million. It is a huge amount for either of the companies, which will strain relations between them.

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