Apple is facing a really tough time. Due to the increased prices of iPhones this year and several good smartphones launching in the budget range, iPhones sales have drastically reduced. This is evident due to the fact that Apple pays Samsung $764 million due to these low sales. You might be feeling confused as to what low iPhone sales have to do with Samsung. Here is the relation.
The Cupertino Tech Giant ordered Samsung to build a 100 million OLED screen panels for them. However, due to low iPhone demand, 100 million screen could not be used. It is worth noting that each display costs about $70 at this bulk order. A significant amount of screen panels were not acquired by Apple.
Samsung, honoring their commitment, created the 100 million panels but when these panels were not taken by Apple, they faced a certain loss. To compensate for the loss, they charged a fine on Apple to pay them for their loss. For quite some time, both companies were in discussion on figuring out a solution to extra OLED panels and where to use them. The discussion did not result in favor of Apple. Thus, Apple paid them $764 million to cope with their loss.
If not for the fine paid by Apple, Samsung Display would have incurred a heavy loss but in their report, the Samsung display showed a good amount of profit. The Korean company confirmed the same.
In general, iPhone sales have only seen a decline in India. In other parts of the world like China, due to reduced prices in iPhone XR and other models have led to an increase in sales.
Well, first Apple paid Samsung a certain amount for the 5G Modem case and now Apple pays Samsung $764 million. It seems that the Korean company is getting ahead of Apple day by day.
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