Apple’s new iPhone X isn’t selling exactly as expected, and as a result, the company has adjusted orders for components, including for the OLED panels manufactured by Samsung.
The South Korean firm has thus reduced production at its A3 plant by 10 percent as compared to the same month of the previous year, which marks the first time in many years when the facility isn’t operating at full speed.
A report from South Korea-based The Investor indicates that the A3 production plant has a monthly output of 135,000 units, and Apple accounts for no less than 105,000 of them. But given the declining demand for the iPhone X, Apple reduced orders and Samsung lowered production, with a bigger impact now expected in the total earnings for the year.
Furthermore, Samsung has also suspended expansion plans for a display manufacturing facility in Vietnam, as the company’s current collaboration with Apple raises several questions as to how many panels the American firm wants to purchase in the coming months.
Weak iPhone X sales
Samsung hopes production would return to full capacity in February and March, though a decision is yet to be made as Apple hasn’t yet discussed the latest iPhone X sales figures.
“The A3 plant is specially designed to supply panels to Apple only. Unless supplies to Apple do not recover in the coming months, it is unavoidable for Samsung to see weaker earnings this year,” a source familiar with the matter has been quoted as saying by the cited source.
Sales of the iPhone X are said to be below expectations after a particularly strong holiday season. Apple struggled with constrained supply following the launch of the iPhone X, and suppliers worked around the clock to bring more units in stores before the end of the year, and now it looks like the entire inventory is large enough to force the company reduce orders in early 2018.
Apple is trying to counter the decline of the iPhone this year with a new generation that could comprise three different models, including a Plus-sized iPhone X, as well as a more affordable model with an LCD display.