Apple may pay Samsung a compensation fee, thanks to low iPhone 12 Mini sales | HT Tech

Apple may pay Samsung a compensation fee, thanks to low iPhone 12 Mini sales

Paying Samsung for lack of orders is not something new for Apple. it has done the same in 2019 and 2020.

By: HT TECH
| Updated on: Mar 23 2021, 22:55 IST
Apple iPhone 12.
Apple iPhone 12. (Unsplash)

Based on reports, it has already been revealed before by analysts that Samsung usually charges a good amount from Apple for supplying its OLED panels for iPhones. However, it looks like this time Apple might be paying a bit more to Samsung due to low iPhone 12 Mini sales.

In case you are unaware, Apple generally enters into agreements with supply chain partners and secures optimal pricing for components. At times, the deal also requires the iPhone maker to guarantee that it will need a certain number of units (OLED panels in this case) to be ordered. So, the report states that Apple may have committed to order a fixed number of OLED panels from Samsung for the iPhone 12 Mini. But since it wasn't able to sell as many ‘Mini' models as expected, it may have ordered less panels, which would have resulted in Samsung's loss. Hence, Apple might have to pay Samsung for the compensation.

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As mentioned by The Korea Herald, Samsung's reduced global OLED shipments for January of 45 million units was down by 9% month-to-month. And the handset that was blamed for this was the low sales of iPhone 12 Mini. It is worth mentioning that Samsung is the exclusive supplier of 5.4-inch OLED screens for iPhone 12 Mini models.

"It is uncertain whether Apple would pay a penalty to Samsung Display, but considering its contract history and sluggish sales of the iPhone 12 mini, it is likely that Apple will compensate Samsung Display," said an anonymous source to the website.

However, it has been added that paying Samsung for lack of orders is not something new for Apple. As per reports, the iPhone maker paid $684 million in compensation to Samsung Display back in 2019 for the same reason. It did the same in 2020 by paying $950 million.

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First Published Date: 23 Mar, 22:55 IST
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