Apple had to pay nearly $1 billion penalty to Samsung; here’s why

By: |
July 15, 2020 12:35 PM

This amount, DSCC stated in its report, is most likely what turned Samsung Display’s operating loss into an operating profit.

Till 2018, Samsung Display was the sole supplier of OLED screens for Apple.Till 2018, Samsung Display was the sole supplier of OLED screens for Apple.

Samsung’s earnings: Premium smartphone manufacturer Apple has had to make a nearly $1 billion one-time payment to Samsung Display! A report by Display Supply Chain Consultants (DSCC), published on Monday, stated that the earnings of Samsung were better than expectations due to Apple’s one-time payment of $950 million for purchasing fewer OLED smartphone panels. The report was looking at the guidance report released by Samsung.

The report said that Samsung had earlier reported that its operating profit would include a one-time gain in relation to its display business arm, but had not disclosed the amount. Another report then stated that the South Korean company had received 900 billion South Korean Won (approximately $750 million) from Apple. However, the DSCC said that its own research suggests that the amount paid by Apple is closer to $950 million.

This amount, DSCC stated in its report, is most likely what turned Samsung Display’s operating loss into an operating profit.

This could mean that the US-based premium smartphone giant’s sales did not match its expectations, with the global pandemic caused by coronavirus did not make the matters any better. The sale of smartphones has been impacted due to the pandemic, and Apple is no exception to it.

Samsung and Apple have a deal, as per reports, where the US-based company is required to buy a certain number of OLED screens from the South Korean giant, and is required to pay Samsung even if he does not buy the agreed number of screens.

Till 2018, Samsung Display was the sole supplier of OLED screens for Apple, but in September 2018, Apple chose LG Display as its second supplier for the screens.

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