Apple has paid Samsung a huge fine after failing to meet the terms of its contract, a turn which is only likely to intensify the rivalry between the two giants.
Apple has paid Samsung a fine of $683 million (£545 million), Reuters reports, having failed to buy as many OLED panels as it had promised under contract. The humiliating backtrack demonstrates two painful truths to Apple fans: Samsung’s sheer dominance in the mobile screens market, and Apple’s deeply disappointing recent sales figures.
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With the rise of OLED screens, Samsung has definitively established itself as the market leader in smartphone displays, eclipsing erstwhile competitors LG, which had led on LCD screens. This dominance has been so overwhelming that it’s been reported in the past that Samsung actually makes more money from manufacturing iPhone screens than from sales of its own smartphones.
All of which highlights an uncomfortable truth for Apple, which famously like to keep as much of its industry in-house as possible; it can’t be easy relying on its biggest rivals for one of the most fundamental components of its keystone device.
It’s only made harder to swallow by the fact that sales of the iPhone have painfully declined over just the last year. In November 2018 Apple even announced that it would stop reporting unit sales, no longer feeling it had something to boast about.
Despite this, it’s well known that the iPhone XR (the most affordable smartphone from the last generation) has exceeded sales of the iPhone XS and iPhone XS Max premium flagships. It’s eye-opening to see that sales have been so much lower than even Apple’s leadership had predicted, resulting in the reported fine of over half a million pounds.
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Apple will hope to avoid paying another fine next year with a successful iPhone 11 launch. From what we know so far about the screen, it’s likely to be very similar to previous models in the series with 5.8- and 6.5-inch variants available, along with the familiar notch in the top of the screen. It will be very interesting to see if Apple retains the manufacturing services of Samsung after this latest spat.