In the Q2 2020 (second quarter) Apple paid Samsung almost $950 million for not meeting the goals. Apple contracted OLED panel purchase and the goal established between the two companies was not meet as Apple purchased fewer OLED smartphone panels than required.
The Q2 payment follows the same pattern from the same quarter last year when Apple paid around $950 for not meeting the forecasts.
Apple is not immune to the changing market dynamics, mostly due to the Pandemic COVID-19 situation. People are now keeping on to their flagship devices for longer, instead of buying every time the next flagship launched by Apple. The forecasts for 2020 aren’t very promising either as the pandemic affected the customers’ purchasing power.
While Apple may have expected to sell more iPhones and would have agreed to a certain quantity with Samsung Display to ensure dedicated production capacity for its OLED panels, market conditions have turned this down and now it has no option but to pay $950 million as a penalty.
Samsung Display isn’t the only display supplier for Apple as in September 2018, Apple choose LG Display as their second supplier.
Neither Apple nor Samsung didn’t wanted to reply to our inquiries regarding this situation.
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