According to display analysts from Display Supply Chain Consultants, Apple paid Samsung around $ 950 million in the second quarter of 2020 for failing to meet OLED panel purchase targets set out in agreements between the two companies.
Samsung announced last week’s second quarter 2020 revenue and operating profit forecasts that included a one-time profit related to the display business. The one-time payment is believed to come from Apple as Apple bought fewer than expected OLED panels for smartphones in the second quarter of the year.
Samsung reported that its operating profit estimate included a one-time profit related to the display business, according to a report on wsj.com, but did not disclose the amount. Last week theelec.net reported that Samsung Display should have received 900 billion KRW from Apple for the purchase of fewer OLED smartphone panels than required. However, DSCC sources expect the payment to be closer to $ 950 million.
During Apple’s third quarter or calendar second, many of its U.S. retail stores in other countries around the world were closed for several months, which, combined with the economic uncertainty, was likely to have a major impact on sales. Even now, many stores in the United States have had to close again as corona virus outbreaks continue to increase.
The payment indicates that Apple did not meet its planned iPhone sales and therefore did not order the expected number of OLED panels from Samsung, so the Cupertino-based company will have to compensate Samsung. Apple reported sales of $ 58.3 billion in April, compared to $ 58 billion in the prior-year quarter. However, due to the instability caused by the ongoing health crisis, the company declined to provide guidance for the third quarter of 2020.
Apple plans to announce earnings for its third fiscal quarter (second calendar quarter) 2020 on Thursday, July 30, to get a better picture of how “iPhone” and other product sales developed during the longer store closings.
Apple made a $ 683 million payment to Samsung in July 2019 after failing to meet its OLED display purchase goals due to poor sales in China and other parts of the world in the 2018 holiday quarter. Apple fixed these issues with trade-in promotions, price cuts, and monthly payment options for “iPhone” that increased sales until the Corona virus broke out in early 2020.