ChannelNews in America has revealed Apple is facing hundreds of millions of dollars in penalty payments to Samsung because iPhone demand has fallen. Apple "demanded" that Samsung construct one of the world's biggest OLED manufacturing facilities exclusively for iPhone screens. Overconfidence of Tim Cook, not adjusting forecasts for trade wars nor a structural decline in global growth, has crushed Apple iPhone demand across the world and breached the contract of 100M OLED iPhone screens per year with Samsung.
While trade wars and lower global growth negatively weighed on iPhone demand, the price of the iPhone X also deterred consumers from upgrading. Apple responded by announcing the supplied Samsung OLED were "faulty" which sources say is a stalling tactic as lawyers are negotiating the fines. The drop in units for Apple iPhone X with an OLED screen is occurring at the same time the smartphone bubble is deflating. Even Samsung Galaxy smartphones are experiencing declining sales.
ETNews said Apple has started to work with LG Display for OLED panels, but analysts believe the move will result in less production capacity and more expensive OLED panels than Samsung. Apple has also invested in JDI (Japan Display) who will be manufacturing the company's LED panels in the near future.
It is hard to imagine how the largest corporation in the world [Apple] could make such a careless sales forecast of one of its most popular products that resulted in hefty fines. Nevertheless, what's more, baffling is how Apple could not see the cycle down of the global economy that started in 1Q18.
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