Component Makers Hit Hard
Apple is reducing its purchase of iPhone X components and the purchase is estimated to reach zero in the second half of this year, according to industry sources on February 1.
Samsung Display, which has supplied display panels for the model, told its partner firms on January 19 to reduce the production of iPhone X components. It added that Apple would buy 20 million, not 40 million, units of its products in the first quarter of this year and the volume would be halved again in the second quarter.
According to those in the industry, this implies Apple is about to discontinue the iPhone X. This is because Samsung Display is the only company supplying OLED panels for the model and, as such, Samsung Display’s orders reflect future iPhone X production.
Component manufacturers are also focusing on the rate of decline in order quantity. Usually, the first and second quarters are off-seasons and inventory adjustment is conducted during the period for new products to be released in the other two quarters. This means component supply orders tend to decrease in those quarters. According to experts, the current rate of decline is unusual even so.
The iPhone X is the first smartphone of Apple that comes with an OLED instead of LCD panel. Its OLED panel uses a lot of South Korean companies’ components and materials as in the case of its 3D sensing module, camera, semiconductor chip, etc. Therefore, any change in iPhone X production plan can heavily affect the South Korean companies. Furthermore, Apple is planning to use more OLED panels in its phones to be released in the future.
It is said that Samsung Display, in the meantime, is trying to offset the decline by more marketing activities in China. In other words, Samsung Display is aiming to maintain its OLED panel supply volume by supplying more to Chinese smartphone manufacturers.