Technology - Google News |
- Sloppy report depicts Apple as struggling with LG as an alternative to Samsung OLEDs on new iPhones
- Wall Street Has iPhone X Sales Jitters, But The Facts Aren't In
- Android Circuit: New Galaxy Note Confirmed, OnePlus 6 Leaks, Samsung Patents 'iPhone X Style' Notch
| Sloppy report depicts Apple as struggling with LG as an alternative to Samsung OLEDs on new iPhones Posted: 20 Apr 2018 07:44 AM PDT A new report claiming to understand Apple's supply chain has asserted that LG screens might be facing development issues as a second source for OLED displays on upcoming iPhones, based on Apple's higher than normal scrutiny of LG prototypes--and then strangely claims this issue is driving iPhone X prices so high that "some" are not buying it.  iPhone X shipped with an OLED display from a single source The Wall Street Journalreport, with a byline of Yoko Kubota in Beijing and Takashi Mochizuki in Tokyo, and additional credit for Tripp Mickle in San Francisco (who recently--bizarrely--claimed iPhone X was selling poorly based on a fundamental lack of understanding of the phone industry and Apple's supply chain) described Apple's efforts to develop a second source for OLED screens (apart from its current sole supplier Samsung) as both a "struggle" and the reason why iPhone X carries a premium price. A report mixing reality with fantasyLG's inability to match Samsung in OLED competency is well known. Last fall, Google shipped two Pixel 2 models, one from HTC with a Samsung display and the other from LG with an LG display. Both had serious OLED screen issues, but the LG "XL" model was shockingly bad. Google shipped it anyway. Sales of both models were terrible. Nobody in the media seemed to care, and if anything, made excuses for Google--which shipped a faulty, inferior product with a high price tag. But now that Apple is investigating LG as a potential OLED supplier, LG's inability to master OLED displays on the same level as Samsung has been recast as a big issue for iPhones--despite the fact that Apple already shipped iPhone X to great success using just one OLED supplier to ensure high-quality output. According to the report, LG was supposedly tasked with building displays for about 20 percent of future iPhone models, with Samsung being relied upon for the other 80 percent. In reality, Apple constantly makes changes to its suppliers based on cost, capacity and competence, and in tandem with changes in demand across different regions globally. Rumors of a supply cut with one supplier can not be accurately interpreted, as a history of false predictions by channel check analysts have demonstrated across the last decade. Samsung's component expense blown out of proportionThe report also stated that Apple's single source for OLED screens would logically give Samsung higher pricing power, another obvious fact that has played out in other areas, including memory and other components where Samsung holds pricing power due to a lack of strong competition. However, it also went out on a limb in stating that Samsung's control of the OLED market was "one reason for the iPhone X's steep $999 price tag, analysts said," before adding original conjecture that, "the price turned off some customers, causing demand to fall short of expectations and forcing Apple to cut orders for parts."  Pitty the troubles of iPhone X in trying to find buyers That conclusion is based entirely on the media narrative that claims Apple expected to build 40 million more iPhone X units in the March quarter than it did, a wildly implausible idea that Japan's Nikkei and the Wall Street Journal kept passing back and forth as the reason why iPhone X was selling "so poorly," even as the new model gobbled up over a third of all profits as the best selling smartphone model. Both sites (and everyone copying their lede) also claimed that iPhone X's high price was hurting sales, despite the fact that demand for the new model (and the also-expensive iPhone 8) dramatically pushed up Apple's iPhone Average Selling Price. If a statically important number of buyers were against paying any premium for the new models, the ASP would obviously not have changed. That's just how math works. Claiming the opposite is just a lie. BOM component estimates are nearly worthlessA reliable, competitive second supplier for iPhone-quality OLED panels would certainly help Apple bargain for better component prices. But the report takes external parts estimates as fact, despite a history of warnings from Apple executives that those third party figures are just ballpark guesswork, and are generally far lower than the actual component costs involved. The Wall Street Journal report claimed that iPhone X's OLED display accounted for "about $97 out of $376 in total estimated cost per device," based on a parts breakdown report. That display cost would indeed be significantly higher than estimated costs of previous LCD screens, which Apple sources from multiple suppliers. Display estimates for iPhone 7 and 8 models have suggested an LCD component cost closer to $50. Yet the screens' cost ratio to the entire iPhone BOM was only a few percentage points different. And even a nearly $50 difference component cost for the display would only result in a retail price difference of about twice that much, or around $100 of the final price. iPhone X is priced $300 higher than the base iPhone 8. Suggesting that Samsung's OLED is the primary reason for iPhone X to be priced at $999 is ridiculous. Apple's premium iPhone X model is more expensive for a number of larger reasons, including that fact that Apple spent billions to develop entirely unique new technology for the device, including its TrueDepth camera and all of the software required to support and market its Face ID features (including significantly rethinking the navigation behaviors of iOS). Third-party component price estimates suggested that all of the development expenses related to Face ID are somehow covered by a "camera module" that costs $16.70, as if TrueDepth was available off the shelf and Apple just pushed a shopping cart through a Walmart and put 50 million into its basket (and then refused to buy another 40 million, because it ended up being so expensive that "some" ended up not buying it). This sort of reporting is not journalism. It's farcical nonsense. Apple, OLED and micro-LEDSourcing OLED displays from a limited number of manufacturers is among the least complex operational issues Apple faces in introducing iPhone X and other new phone models. Apple only has one supplier (TSMC) building its A-series chips. It only has two makers building cellular modems (Qualcomm and Intel, with Intel struggling like LG to keep up with the market leader) and it uses a variety of other components that are unique to a specific manufacturer. Apple has single-sourced the base of its ARM and GPU intellectual property from the first iPhone. Starting in 2010 it began developing custom ARM designs. This year Apple released its own GPU design, which ended up being slightly better than the Imagination Technology GPU IP it had been relying upon. Apple is also reportedly working on internal analog and perhaps modem designs to similarly strip itself from dependence upon single outside suppliers. Those efforts are all vastly more complex than evaluating a second supplier of a nearly commodity component. In the area of display technology, Apple's current OLED issues appear to be a short-term issue for the company. In the long term, the company is working on micro-LED, a different technology that promises to deliver important advantages to OLED. That development is a matter of concern to both Samsung and LG. The Wall Street Journal didn't mention that. </span> |
| Wall Street Has iPhone X Sales Jitters, But The Facts Aren't In Posted: 21 Apr 2018 03:01 AM PDT  Ever since we broke the story about the iPhone X's $1000 price tag I've wondered what the buying public's response would be. Today, almost six months after the X's launch, the verdict may still be out. The iPhone X had a very promising first quarter. It looked like consumers really would pay more than a grand for one of those shiny things that have become the organizational center of our lives. "iPhone X surpassed our expectations and has been our top-selling iPhone every week since it shipped in November" Apple CEO Tim Cook told analysts after reporting strong results for the holiday quarter. Apple doesn't break out revenue from individual phone models, but a higher iPhone average sale price (ASP) strongly suggested heavy sales of the X and the iPhone 8 Plus. There's not much doubt that after a year of anticipation, many of the tech-savvy and Apple faithful hurried out to buy an X after it hit shelves in early November. Apple will report results for its March-ending quarter on May, and most analysts believe iPhone sales will be fairly typical for the first quarter of the year. But by the second calendar quarter of 2018, signs of stress might be showing in iPhone X sales. That first wave of enthusiastic buyers will have ended, and a very different kind of consumer may be sizing up the iPhone X–and its imposing price tag. (A colleague of mine very recently bought a new 256MB iPhone X with Apple Care and paid a final price of $1450 after taxes.) Some supply chain reports this week suggest those consumers aren't buying in high numbers. Yesterday one of the main chip makers for the iPhone X, TSMC, revised down its full-year revenue forecast based on weak chip orders. Same goes for AMS, which provides 3D sensing technology for the X. This suggested Mirabaud Securities chip industry analyst Neil Campling that Apple had cut back its chip orders for the X "With the declines in iPhone X orders and the inventory issue at TSMC at record highs which basically reflect a need to burn off inventory. Why? Because the iPhone X is dead," Campling wrote in a research note, adding that Apple would likely discontinue the phone this summer. Campling believes its the X's price that's preventing people from buying. For Morgan Stanley analyst Katie Huberty the soft chip demand was one of several factors that point directly to weak iPhone sales later this year. Accordingly, on Friday she dramatically revised down her team's estimate of iPhone sales for the June-ending quarter from 40.5 million to 34 million. "China smartphone activation data points to a reversal in Apple share trajectory with losses through March that presents a meaningful headwind in the largest smartphone market," the analyst wrote in the research note. To make matters worse, the The Wall Street Journalreported Friday that LG may not be able to provide the pricey OLED displays for high-end iPhones after all. Apple had hoped LG would help it at least offset its reliance on Samsung for the displays, but that seems in doubt. It was all enough to spook investors. Apple shares dropped 4% in trading on Friday.
Doom-And-Gloom DoubtersOf course Apple watchers have heard these doom-and-gloom stories many times before, sometimes involving other products which turned out to be doing OK. And more than a few people people called out Mirabaud's Campling for his announcement of the iPhone X's summer demise. Among them was Moor Insights & Strategy principle analyst Patrick Moorhead, with his usual flair: "Apple isn't 'killing' the iPhone X–that's absurd and a reckless thing to say," he wrote in an email to Fast Company Friday. "Apple sold more iPhone Xs than any other phone last quarter even though it was its most expensive. While the numbers may abate a bit, it's still hot." "I expect Apple to replace the iPhone X like they do with every other phone with an improved iPhone X," Moorhead continued. "The suppliers in question are either being cut out of the new model or just haven't seen the orders yet for the new model." That's certainly plausible, although when I saw Campling's comments I quickly recalled an early March survey conducted by Piper Jaffray. The firm asked the following question: "You currently own an iPhone, yet you didn't upgrade to (what Apple believes is) the best Apple phone yet, the iPhone X. Why?" Most of the answers Piper Jaffray received were at least related to price. 31% said "it's too expensive," balking at the iPhone X's $999 and $1,149 price points. 44% said "my iPhone works fine," a decision that's necessarily influenced by the cost of the alternative–upgrading. I also remembered the news from earlier this week that Apple may be planning to release a number of far less expensive phones this September. The usually reliable analyst Ming-Chi Kuo of KGI Securities said in a research note that Apple would introduce a 6.1-inch dual-SIM iPhone with a price tag of between $650 to $750, along with a single-SIM model that could be priced as low as $550. Apple is also expected to refresh its lowest-priced phone, the $349 iPhone SE, within the next couple of months. In short, there's evidence that Apple may be about to cater to the many consumers who will never shell out a grand for a phone. The iPhone X's price tag is a particular issue in the world's biggest smartphone market, China, where iPhone sales have been much dampened by less expensive phones from domestic companies like Huawei, Xiaomi, Vivo, and Oppo. Some macro factorsare at play, too. The global smartphone market is contracting. And people are holding onto their older phones longer. But no, I don't think it's likely at all that Apple would ditch the X this summer. The optics alone would be too negative. Kuo also believes Apple will announce some new high-priced phones this September that bear the "X" brand. These include a second generation of the X with a 5.8-inch OLED display, and a larger 6.5-inch version that might well be called the iPhone X Plus. There's a good chance both these phones will start at $1000 or more, especially since Apple will likely be paying a premium price for the Samsung displays in them. If Apple ends the year with the portfolio of iPhones Kuo has outlined, possibly ranging from $349 to well above $1000, the company would come as close as it ever has to offering something for everybody. And we might have a much better idea about its confidence in the future of the ultra-premium category it established with the iPhone X. |
| Posted: 20 Apr 2018 03:53 PM PDT  The Samsung Galaxy Notch Samsung has been hard at work on a way to increase the screen to bezel ratio of its smartphones. Until it can hide everything under the glass and still have the glass act as a screen, there's one solution on the market that everyone is following. Yes… Samsung is thinking about a Galaxy Notch, as I reported earlier this week:
Samsung S9 smartphone at Mobile World Congress 2018 in Barcelona, Spain. (Photo by Miquel Llop/NurPhoto via Getty Images) Galaxy Note 9 Has A New Crown Meanwhile the South Korean company has managed to have the Galaxy Note 9 confirmed. Thanks to a number of leaks we have three key details. The headline feature (an under the screen fingerprint reader), the key specification change (a 4000 mAh battery), and the promise of a codename ('Crown'). Let's add it all up:
Forbes' Gordon Kelly has more. S9 Beats iPhone X In Durability Tests Sitting ahead of the rest of the smartphone pack, including Apple's iPhone, is Samsung's Galaxy S9 and S9 Plus. The latest look at the durability of your handset comes from Consumer Report and is covered by SamMobile.
https://www.sammobile.com/news/consumer-reports-impressed-galaxy-s9-durability-speed-sound ">Taking a look back at seven days of news and headlines across the world of Android, this week's Android Circuit includes the Samsung Galaxy Notch, Note 9 details confirmed, the S9 beats the iPhone X, the Nokia 7 Plus release date, OnePlus 6 photo samples leak, Android's gesture-based future, Oreo's market share, a patent for the under-the-screen fingerprint reader, and Razer hits Best Buy. Android Circuit is here to remind you of a few of the many things that have happened around Android in the last week (and you can find the weekly Apple news digest here). The Samsung Galaxy Notch Samsung has been hard at work on a way to increase the screen to bezel ratio of its smartphones. Until it can hide everything under the glass and still have the glass act as a screen, there's one solution on the market that everyone is following. Yes… Samsung is thinking about a Galaxy Notch, as I reported earlier this week:
Samsung S9 smartphone at Mobile World Congress 2018 in Barcelona, Spain. (Photo by Miquel Llop/NurPhoto via Getty Images) Galaxy Note 9 Has A New Crown Meanwhile the South Korean company has managed to have the Galaxy Note 9 confirmed. Thanks to a number of leaks we have three key details. The headline feature (an under the screen fingerprint reader), the key specification change (a 4000 mAh battery), and the promise of a codename ('Crown'). Let's add it all up:
Forbes' Gordon Kelly has more. S9 Beats iPhone X In Durability Tests Sitting ahead of the rest of the smartphone pack, including Apple's iPhone, is Samsung's Galaxy S9 and S9 Plus. The latest look at the durability of your handset comes from Consumer Report and is covered by SamMobile.
https://www.sammobile.com/news/consumer-reports-impressed-galaxy-s9-durability-speed-sound |
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