Apple seems to be stumbling from one catastrophe to the next. After it recently became known that around 1.4 billion iPhones and iPads globally are vulnerable to being hacked, the company made the right decision to withdraw its 5.8-inch iPhone.
Now, however, an ETNews report has revealed that Apple could face fines of hundreds of millions of dollars because it isn’t selling enoughiPhones to fulfil an agreement that it made with Samsung.
According to Samsung, Apple “demanded” that the firm builds a huge OLED screen factory specifically for iPhones. This was based on Apple needing 100 million OLED iPhone screens every year, but with sales plummeting, the plant is presently operating below 50% capacity.
This combination of huge upfront costs and below-planned production has played a major role in Samsung’s Display Division reporting a massive drop in operating profits last year, from $4.9bn to $2.26bn. To add insult to injury, Apple very quickly slapped Samsung with penalties after a number of panels that it made for the former malfunctioned.
Apple is apparently not likely to fork out any cash here but will instead compensate Samsung with more contracts for OLED screens in new devices. The 2020 iPhone XR will have an OLED screen, but that alone will not be enough to satisfy Samsung, so Apple reportedly plans to bring out MacBooks and iPads with OLED screens.
This would be a major upgrade for these devices, which currently still feature LCD screens. Apple has also been reported as working with Foxconn on a next-generation display technology known as Micro LED, which could replace OLED – but only several years from now.
Of course, if the company brings out MacBooks and iPads with OLED screens, they will undoubtedly be more expensive than the current range – which would mean that Apple has very cleverly shifted the huge burden of paying its debt to Samsung from its own cash resources to customers.