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Samsung Exposes Apple's iPhone X Problems

This article is more than 6 years old.

The good news is we know Apple ’s big 2018 iPhone changes. The bad news is the gambles Apple will take could well go horribly wrong... 

In a new report Bloomberg’s ever-reliable leaker Mark Gurman, reveals that not only has Apple’s much expected “sales supercycle” failed to happen but there’s now serious concern about the next quarter and its potential knock-on effect for the company’s upcoming new iPhones. And it all centres around the iPhone X.

Apple

Speaking to “people familiar with the situation”, Gurman explains the “The iPhone X didn’t sell as well as Wall Street anticipated” but this is just the start. Moving forward “Samsung, the top OLED supplier, expects to ship about half the units planned to Apple” thanks to diminished demand. You heard that right: Half.

What’s behind this? Cost:

“The main sticking point has been price,” says Gurman. “Each 5.5-inch LCD screen used in the iPhone 8 Plus costs Apple $52, whereas the iPhone X’s 5.8-inch OLED display is $110, researcher IHS Markit estimates. Those prices should go up in the near term as Apple sources larger screens for its upcoming nearly 6.5-inch model.”

Yes, while the $999 iPhone X starting price (before sales tax) has given potential customers pause for thought, the biggest driver behind this cost is its OLED display. A display Apple plans to make substantially bigger with the 6.5-inch ‘iPhone X Plus’ later this year.

How expensive could this make the iPhone X Plus? Estimates suggest up to $1,400.

Concept Creator

As such Gurman says the pressure is mounting on Samsung to reduce OLED prices, but the company is in no mood to do so. Firstly because it already has internal demand from the launch of its new OLED-sporting Galaxy S9 and Galaxy S9 Plus and secondly because pushing down prices would force rivals to do the same and that opens up the OLED market to Samsung’s biggest threat: Chinese smartphone makers Xiaomi, Oppo, Vivo and Huawei.

Consequently, Apple’s discovery that many customers are starting to think twice about paying over $1,000 for the iPhone X couldn’t come at a worse time. Apple is already locked into the next cycle with iPhone X Plus production tests already underway, it has an unbending supply chain partner for the model’s most expensive component and the iPhone X Plus is going to cost more than any iPhone in history just as customers start to say ‘Enough is Enough’.

Meanwhile, those very same customers recently learnt legal pressures have pushed Apple into offering a year-long promotion where they can renew their existing iPhone’s performance and restore original battery life for $29. It’s a no-brainer.

The iPhone X was supposed to be Apple’s celebration for 10 remarkable years of iPhone success. The irony is history may prove it was the moment the company went too far…

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