Apple pays Samsung $1 billion penalty for ordering too few OLED screens

This isn’t the first time Apple paid nearly $1B to Samsung

Apple iPhone X held in the hand with colourful wallpaper

Apple had to pay Samsung a $950 million fee after failing to purchase a set number of OLED displays, according to Display Supply Chain.

According to the report, the contract between Samsung Display and Apple includes a clause that guarantees the minimum production volume given the Korean company's exclusive investment in production for Apple. 

Advertisement - Article continues below

Samsung Display was more than happy to take Apple’s nearly $1 billion. The display manufacturer swiftly tossed that cash in its revenue pile and turned what was expected to be a small year-to-year loss into an operating profit. 

This isn’t the first time Apple’s had to pay off Samsung Display for an OLED short order. It did the same in the second quarter of 2019 with a payoff that was estimated to be around $750 million. 

There’s no mention as to whether or not these payoffs were in liquid cash or not, but 9to5Mac mentions there is a chance Apple awarded Samsung Display enough orders to where the profit matched the penalty Apple would have had to pay.  

Does this shortfall in OLED orders spell disaster for Apple? Not likely. Chances are this is simply due to the coronavirus outbreak interrupting supply chains and sales. Apple will likely be back to business as usual once this outbreak passes and sales pick back up. 

Featured Resources

Staying ahead of the game in the world of data

Create successful marketing campaigns by understanding your customers better

Download now

Remote working 2020: Advantages and challenges

Discover how to overcome remote working challenges

Download now

Keep your data available with snapshot technology

Synology’s solution to your data protection problem

Download now

After the lockdown - reinventing the way your business works

Your guide to ensuring business continuity, no matter the crisis

Download now
Advertisement

Recommended

Windows will soon mirror smartphone apps on your PC
Microsoft Windows

Windows will soon mirror smartphone apps on your PC

6 Aug 2020
Samsung Galaxy Note 20 Ultra hands-on review: Note so special
Google Android

Samsung Galaxy Note 20 Ultra hands-on review: Note so special

5 Aug 2020
Samsung Galaxy Note 20 hands-on review: A bronze medal smartphone
Google Android

Samsung Galaxy Note 20 hands-on review: A bronze medal smartphone

5 Aug 2020
Apple hit with $1.4 billion Siri patent infringement lawsuit
Policy & legislation

Apple hit with $1.4 billion Siri patent infringement lawsuit

3 Aug 2020

Most Popular

How to find RAM speed, size and type
Laptops

How to find RAM speed, size and type

3 Aug 2020
How to use Chromecast without Wi-Fi
Mobile

How to use Chromecast without Wi-Fi

4 Aug 2020
How do you build a great customer experience?
Sponsored

How do you build a great customer experience?

20 Jul 2020