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Despite Apple CEO Tim Cook’s atypically specific comments yesterday establishing the iPhone X as Apple’s best-selling iPhone model, a report from Business Korea doubles down on claims that Apple will discontinue the device this year. The report suggests that Apple’s component orders are falling at an unusual rate, in the process impacting many South Korean companies.
According to the report, Apple’s sole iPhone X screen supplier Samsung Display has told partner firms that Apple has already cut screen orders from 40 million to 20 million for this quarter, will drop from 20 million to 10 million next quarter, and plans to bring the number down to zero in the second half of this year. As Business Korea notes, the declining screen orders strongly imply the iPhone X’s discontinuation, as Apple only buys OLED iPhone screens from Samsung Display; thus, Samsung’s orders directly reflect total iPhone X production.
Whether Samsung can be relied upon for accurate information in this situation is questionable, due in part to Samsung’s status as a key rival and major supplier to Apple. The companies’ relationship is famously frayed, having survived lawsuits and public spats largely because the Korean company has remained uniquely capable of supplying various components Apple requires. In recent times, Samsung and Apple have jousted for the title of global smartphone leader, swapping places from quarter to quarter.
It’s possible — though not likely — that Samsung is being cut out of Apple’s screen supply loop. Samsung’s biggest Korean competitor, LG, was understood to be Apple’s preferred choice for OLED screens, but reportedly fell short of the standards demanded for the iPhone X. LG might have remedied its screen production concerns, and Apple could be planning to bring LG’s screens into the supply chain mid-cycle. But the Business Korea report is more likely to be correct. Recent analyst guidance suggests that Apple will debut an iPhone X replacement and a Plus-sized model this year, making discontinuation of the current model possible.
Business Korea reports that Samsung Display is working to offset the decline in Apple purchasing by offering excess OLED screens to Chinese smartphone manufacturers — a decision that may speed the adoption of high-quality OLEDs in iPhone competitors. In that regard, Apple’s pitch that the iPhone X represents “the future” of phones may wind up being true even sooner than expected.
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