Apple could owe Samsung penalties for not selling enough iPhones

Apple allegedly owes “hundreds of billions of won” to Samsung Display as a penalty for not buying OLED displays at the agreed level.
Written by Adrian Kingsley-Hughes, Senior Contributing Editor

The tense relationship between Apple and Samsung Display could be on track to becoming even more strained as poorer than expected iPhone sales could leave the Cupertino giant having to foot a massive penalty.

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According to ETNews, an outlet with a good track record when it comes to insider Apple news, Apple reportedly may owe Samsung Display "hundreds of billions of won" in penalties for not buying OLED displays at the agreed level.

A 100bn won is about $86m, so depending on how many "hundreds of billions of won" Samsung Display is talking about here, the penalty could be chump change for Apple, or it could be quite sizable.

The penalty goes back to Apple's insistence that Samsung Display build a facility to exclusively manufacture OLED displays for the iPhone. Apple had told Samsung Display it would need 100 million OLED iPhone displays a year. But a slump in iPhone sales had a knock-on effect for Samsung Display, which saw its operating profits halved in a year, falling from 5.7 trillion won in 2017 to 2.62 trillion won in 2018.

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The report claims that Apple is unlikely to pay any penalty in cash, but will instead offer Samsung Display additional contracts for OLED panels in new devices as compensation.

The report also claims that Apple had already hit Samsung Display with "a small penalty" for "performance bottlenecks in the parts delivered to Apple."

Neither Apple nor Samsung Display would comment on the report.

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