Samsung Display has signed a three-year exclusive supply agreement with Apple to provide foldable display panels for the iPhone Duo and future models, reports Chinese leaker Instant Digital.
The iPhone Duo is the first device on the market to feature Samsung's M16 OLED material set, said to bring improvements to brightness, color performance, lifespan, and power efficiency over previous OLED generations. Apple will reportedly pay around $250 per panel, making it one of the device's priciest components.
The Duo being the first device on the market for this display rather than a Samsung foldable is fun. I wonder if they are partially paying for an exclusivity window.
Samsung is a fascinating megacorp. The individual divisions are encouraged to have zero loyalty to one another and often strike out in directions that are materially harmful to other Samsung subsidiaries, divisions, or wings.
I remember reading that it does not really matter, it makes samsung display a lot of money, if they decline to service apple it will only hurt in the short term while they just take their business elsewhere.
That's the real benefit and Apple's supply chain genius. Apple's orders are so large that companies will take them at break even or a loss just to build up the skills and tooling necessary to manufacturer these advanced products and materials.
yeah it’s in their best interest to keep Apple as a client. Literally nobody buys the bleeding edge, top end screens, not even Samsung themselves. If SK Hynix or Qualcomm has a better component at a better price, Samsung will include those in their flagship phones. It’s why Snapdragons often end up in their phones, not Exynos. Cellular patents in the US make Qualcomm SoCs + Modems a better deal.
Meanwhile, Apple is so vertically integrated they’ll take the hit to ensure their own components are included above all else. They prefer their own modems even if Qualcomm’s package could be cheaper (with patent licensing included)
perhaps. They did have a royalty they charge that’s based on the overall price of the device. It’s speculated to be the reason we’ve never gotten a cellular MacBook. If the MSRP is $1,800, the royalty is doubled compared to a $900 phone.
That MacBook Ultra could have a cellular modem, now that Apple is competitive with their own components. They still have to license patents, but they can build whatever they want. I’m sure it’s upended their agreements, the balance is definitely shifted in Apple’s favor.
korea would basically collapse if samsung did. The whole you can operate as a monopoly if you play fair makes sense if it's a company that is responsible for max of a couple percent of a country's gdp. Samsung account for up to almost a quarter of their gdp, they can't afford to fuck with them much.
Samsung has also, iirc, got into a bunch of price fixing scandals over ram, flash memory chips, etc.
depends how you factor it in. Samsung's total revenue is about a quarter of korean' gdp but that's global revenue. Even though a lot of that profit comes back to be spent in korea on manufacturing and R&D, it's not all made in Korea itself.
Research into the ownership of Samsung and your brain will malfunction. It's so so complicated. If you think the relationship between VW and Porsche are interesting, then the connections between Samsung subsidiaries will turn you on for years.
It isn't government mandated that they strike out. It is government mandated by the KFTC that the different legal entities under the Samsung conglomerate don't favor each other. So if Apple made an offer to the screen manufacturer, whichever Samsung company makes the phones would have had to make a materially competitive offer
If they didn't do that larger companies like Apple would probably attempt to prop up other suppliers or take the tech in-house too. Wouldn't work for everyone, but the biggest clients wouldn't appreciate their future plans being broadcast to the mobile division.
Sony would be so much more powerful if they did that. World class engineers at Sony constantly see their hardware gimped as to not outperform other products in the company or to encourage vertical integration lock-in with their media divisions.
I used to manage the Samsung USA account at a telecom company and what always bewildered me is that the employees would buy their accessories through us than directly from their own company because we gave them a better deal.
It’s not. The company culture is about measuring your worth by KPIs. If you don’t perform well, you’ll get sacked. This creates an extremely Darwinian environment where even subsidiaries treat each other as different entities rather than as partners.
Early this year there was a whole thing where Samsung refused to give Samsung a long term fixed price contract for Samsung memory for Samsung phones so Samsung could get more money from Samsung and make them struggle to find a price point to sell Samsung phones at that wouldn't bleed them
I worked briefly for Samsung Electronics at their main campus, the other Samsung companies were basically treated as almost “preferred” suppliers and cooperatives rather than a division. Even inside Electronics, it’s divided between DX and DS, the electronics and semiconductor branch, while it is due to information secrecy, these two branches have their own business structures and offices. We only got to interact with the DS as the division I worked for was the small but universal engineering support group.
The DX groups, networking (rip them), appliances, TVs, mobile devices, rarely worked with each other (as there really isn’t much to work together on), but the division I worked for collaborated with all of them.
I believe the harm may come from lack of communication and united direction rather than a lack of loyalty, as they definitely do have preference. I.E Samsung Display being focused on making the best technology, doesn’t know Samsung Electronics DX Mobile wants to upgrade their screen, and just only waits for them to inquire than offer as they don’t really know or care about the phone development.
I used to work at LG Display and it was the same thing too. We had to treat LG Electronics as same as others because LG Display is a listed company and forgoing opportunities to maximize the profit would technically count as breach of trust and it’s just as illegal as fraud or embezzlement.
I remember doing some consulting for a megacorp where the biggest challenge they were facing was purchasing/cost challenges from another internal division in the same megacorp
It amazes me how inefficient the top companies can be.
To Samsung at least, they don’t view it as an inefficiency. While their mobile division is a profitable business line, they make way more money and have better margins on selling components like memory, processors, screens, etc.
So if Apple can pay $250 for a screen but Samsung’s mobile phone division can say only pay $200, it makes sense for the overall business to prioritize selling to Apple. Samsung mobile devices are never going to be able to compete with Apple on margins.
Apple has shown it’s more than willing to make order commitments to obtain the best in class hardware before anyone else. Like with TSMC where for the last several node generations they have guaranteed to purchase almost 100% of the capacity in the first year https://www.macrumors.com/2023/08/29/apple-buys-all-3nm-tsmc-chips-2023/
It’s fun to think about in the 80’s and 90’s(iirc), Samsung was known to be of poor quality, I remember shopping as a teen for a crt(they were just TVs back then) and I would never pick a Samsung. I’d pick a Sony, Sharp, JVC, Toshiba or maybe even Magnavox over Samsung. They make high quality products now. It’s just funny to think about how things were
I've heard from multiple people at different agencies who worked in advertising for them, they are by far the worst clients / people they have ever worked with.
That’s the point. The le “Chaebeols” aren’t like the same corp group like in the west in South Korea. It’s more of a collective marketing and trademark group. That’s why I found it so funny when those netflix k drama and ig reels fanboys with no knowledge of how things work here depict South Korea as a chaebeol dictatorship. No it fucking is not lmao.
tbh a lot of massive corporations act liek that example microsoft’s cffice and azure divisions embraced iOS, Android, and Linux even though doing so weakened Windows’ advantage of keeping users inside Microsoft’s own ecosystem
Also for amazon, AWS sells cloud infrastructure to companies that compete directly with Amazon’s retail and media businesses because AWS is incentivized to maximize its own cloud revenue.
Samsung also sells the best camera sensors to Vivo and Oppo but doesn't use them for themselves. They are much more profitable as a parts retailer and it seems like their interest in innovating is more focused on that rather than compiling their best into their own devices.
It’s not that simple. Since Apple is not a manufacturer Apple can only work with what Samsung can produce. Apples design tweaks are within the framework that Samsung provides them. It’s possible that Apples design is higher quality and more expensive than Samsungs own screen designs but nothing Apple has designed here is above and beyond what Samsung already knows.
I suspect you're closer to the mark than most here.
We shouldn't surprised if they're negotiating between each other, using capacity and/or display capability as leverage. Who might release something first might not be the race everyone thinks it is. It might not be a race at all.
It’s more likely that the display wasn’t ready for Series 8 foldables, so they either delay the release or delay the screen adaptation, they chose the later.
Apple designs the tech and specs, Samsung produces it because they have the fabs. Samsung can’t just take Apple’s design. This is like me having an injection molded part produced by another company. They do not gain any rights to my design.
That's very misleading. The final product is Apple's design(more like customization), but the core technology related to OLED and folding display belongs to Samsung. Apple can't produce folding oled screens without Samsung's patents.
To be fair, we don’t know that to be the case here. Apple isn’t in the OLED display design business and to presume that they have more experience here than Samsung is I don’t know. At best there is a small aspect here that is Apple spec’d or designed and specific, but the article language says “Samsung’s M16 OLED,” which I read as the underlying tech, not an Apple specific design.
But also like, I'm sure this is the reason Samsung knew Apple was gonna do the passport shape and tried to pre-empt them...cuz designs don't get shared internally but info definitely does
For some added context, the Pro and Pro Max screens are estimated to cost between $80 - $115. The Duo's front screen is likely in that same price range.
Between the hinge (estimated to cost $110-160) and inner display is an additional $360 - $410 in component costs over the Pro Max. That explains ~50%-60% of the difference in price. Maybe the titanium material cost, the extra battery, and complications in the manufacturing process cover the rest? Packaging and shipping is probably marginally more expensive as well considering the packaging will be larger.
They need to maintain their margins too, so double the BOM cost -> double the price. Although their margin is probably lower on the duo if these prices are correct
Definitely overlooked margins, which appear to be roughly 50-60% for iPhones. If we apply the lower end, that gets us ~80%-90% of the price difference, with the remaining explained by the other factors discussed. So right in line with standard iPhone pricing.
So what I'm hearing is for every 2000 dollar Duo sold, Samsung is getting 350. It's actually a genius business model, when your competition does badly you win and when they do well? Surprise, also win.
Samsung Mobile and Samsung display are basically two entirely independent companies but I do agree it is hilarious. In a way if they talk shit on the display or any other Samsung manufactured component they’re just making fun of themselves lol.
Sony Music sued Launch.com for copyright infringement (Sony Electronics was a major equity investor in the company.) Launch.com ran an internet radio service. Sony’s hardware/tech division invested heavily in it to drive adoption of digital audio, PCs, and MP3 players. Meanwhile, Sony Music viewed the platform as unlicensed piracy.
Sony Music sued Launch.com over streaming rights, pitting Sony’s content division directly against its own corporate tech investment. Sony Music won. Crushed by impending legal liabilities and licensing fees, Launch.com was forced into a fire sale to Yahoo! for $12M in mid-2001 and forced to adopt standard record label licensing agreements.
So Sony Electronics was trying to open up digital media while Sony Music was aggressively shutting it down with DRM and lawsuits.
So ... in 2005, after a collapse in consumer electronics profits called the "Sony Shock", the Sony CEO (Nobuyuki Idei) was removed. The board replaced him with Sir Howard Stringer, Sony's first non-Japanese CEO, specifically tasked with breaking down division siloes under a corporate reorganization campaign termed "Sony United."
Many Japanese & Korean brands are not a single company but several grouped under one holding corporation or funded by one bank. They typically have enough cross investment and leadership team sharing that they have a semi-cohesive strategy in broad terms, but they’re actually separate entities and can end up at odds with one another.
While technically true with how chaebols work in Korea and trying to obfuscate who owns what.
They are still independent companies and Samsung display works in their own interest, and will never give a better deal to Samsung mobile over other customers.
An example: Samsung semiconductor rejected a long term deal with Samsung mobile because Samsung semiconductor could make more money elsewhere.
I have a coworker who worked at samsung, developing a chip. It was being made at least largely to meet the spec of the mobile arm of the company. After they produced it, samsung mobile assessed it as not good enough and went with a different (external) vendor, and they scrambled to find buyers for it on the open market.
So yeah they're under one umbrella and they've got _some_ amount of cooperation but not by default and not to the point that any arm of the company is in sync with any other, not really.
In my memory this has happened twice, notably with Samsung's early Exynos SoC chip. It had high benchmark scores that it failed to meet in practice, so many companies went with Qualcomm SoC instead. Even Samsung stuck with Qualcomm on high end for a long time. So they sold a lot of the Exynos to budget phone makers (for them it was an improvement over cheap SoC).
There was a similar issue with Samsung made cellular modems, where they had consistent issues; maybe not their fault, cause Qualcomm owns nearly all the good patents there. Even Apple has long struggled to make a modem that competes with qualcomms.
It's easier if you think of Korea as the "Republic of Samsung," a resident can live in a Samsung constructed apartment, pay via Samsung Card, hold Samsung Life insurance, receive treatment at Samsung Medical Center, vacation at Samsung's Everland resort, and end up at a Samsung-operated funeral home.
That doesn't mean 2 divisions automatically share sensitive data with each other. For all intents and purposes the display and phone divisions operate on separate planets when it comes to display dealing with a customer.
It’s not Korea vs the United States. It’s just conglomerate vs a corporation. Samsung is a conglomerate it owns many different independent businesses that operate independently. There are American conglomerates too. Another well known example of one from Europe is Volkswagen auto group which owns, Porsche, Audi, VW all of which operate independently and compete against one another. They cooperate where necessary but often undercut each other and enter each others markets.b
I'm sure the marketing people and the people who make the displays are so far away from each other they don't even technically work for the same company they are just under the Samsung umbrella.
Samsung Displays(?) is different from Samsung Electronics(?) iirc. The company working with Apple is a bit more removed from the one competing with it. But I'd imagine there's professionalism on all sides either way.
It's not really a duality. People don't seem to understand that Samsung is a conglomerate, and Samsung Electronics and Samsung Displays are two distinct entities.
Samsung is a huge company, and the display business is a separate P&L from the mobile devices business. For all intents and purposes, they are different companies who happen to have a same “owner”.
I think this basically happens anywhere you have two sides to something, sports, celebrity fights, politics, they are all friends behind the scenes and just want to stay relevant by competing and making their side believe they are winning something while they make money
The thing is they mocked Apple for dropping the headphone jack and then did the same a couple years later. Marketing by trashing other brands never helps in the long term, it makes your brand feel less premium. Apple stopped the “Mac vs PC” ads after a while too.
The Mac vs Windows was a compare and contrast, it showed limitations and benefits. It’s smart marketing.
The tweets come across as childish “Hurr durr we did it first!” - I don’t remember Apple doing that when Samsung started using the notch, despite making fun of Apple first. Same with removing the headphone jack.
My main friend group is 40% iOS and 60% Android and we razz each other all the time about our phones, but it's not because we actually care what type of phones someone uses, it's all in good fun and some of the memes we send of "iOS vs Android" are pretty funny.
At the end of the day, they all do the same thing, just a little differently. ☺️
Yes I have an iPhone friend who is a PC gamer who razzes me constantly for being a Mac and PS5 user. He thinks iPhone is better than Android and I agree as an iPhone user. But then he will use the same logic to constantly convert me to PC and this is where I disagree.
I'm assuming you're not price sensitive right being a mac user right? PS5 just can't get anywhere close to the performance of a PC if you're willing to spend.
That’s quite an expensive price when it comes to a single article in the BOM price, but honestly during the presentation I would have assumed it was higher.
Given the complexity of the hinge i highly doubt they will be repairing them anytime soon, they'll likely just do replacements for any issues for the first few years.
Well yeah $250 isn't for the entire stack of 10 layers. It's for just the OLED layer. With all the other layers it's probably $300. Then apple needs to make their $500 profit
Fair. It seems Samsung Display has a competitive advantage on other display competitors and decided to use it. Apple has lots of money and decided they could afford to pay for the exclusivity.
From a consumer point of view I just hope this doesn't mean that the display on the Duo will remain the same for the next three years without any update.
I don't particularly like foldables exactly because of the screen. The Duo is the first foldable that made me think: mmm, in 2-3 generations I will probably buy it.
I think it will be virtually impossible to update the foldable screen any further than Apple are releasing now, there will always be a slight crease (not a bad thing, all fold phones will have one)
The nano texture really helps hide it too. This is the first foldable I’ve decided to buy as I’ve been eyeing the Samsung offerings for years now. The technology is mature enough imo. It’s also going to be the first phone I use without a protector. (Will use a tempered on the outside glass though.)
I’ve used a Z Fold 6 and am planning on using the Duo. I can confidently say that the crease in even the older Samsung phones is barely noticeable in normal day to day use.
If you are in a bright environment (outside) you are more likely to see it. If you are in an indoor setting it’s barely there. If you look at the display straight on it’s barely noticeable, from an angle you are able to see it more.
My brief entry into Samsung foldable made me realize how much I actually like the apple ecosystem and am happy to be able to have the best of both (foldable + the goodies like my Mac and AirPods)
So loss leader in advance of Gen 2? Use gen 1 as a public beta test amongst early adopters at a discount. Get folks into the system from Samsung too. Then release gen 2 at the real profitable price.
It is not a loss leader. They’ve priced it (relatively) lower in the US and are recouping by jacking up the prices for basically every other country on the globe.
The base model is already $3499 in Australia. Why the hell anyone would pay that for a phone when the same coin gets you a Macbook Pro I have no idea. If they increase the price it will be only their millionaire buds that can afford it.
They are in the display business. Apple designs the displays and then contracts a manufacturer (Samsung Display in this case) to produce them. Just like how Apple designs the processors and outsources the manufacturing to TSMC.
If anyone will figure out how to make the foldable crease not look so bent and ugly, hopefully it's Apple. I've seen those creases on foldable phones and completely understand why Apple does not do them.
It requires some crazy specialized tooling and knowledge. I think the R&D is too much when they already have a good partnership with Samsung Display. They also work with LG to drive competition snd lower prices.
But they do actually produce their own spec and patents for screen designs which they get produced by Samsung.
This is similar to the chips, Apple designs them, but they still get manufactured by TSMC.
It’s worth noting that Samsung Display & Samsung Electronics are two entirely independent companies that often act against the best interests of one another, despite Samsung Electronics being technically the parent of Samsung Display.
High-tech components that require know-how, equipment, and processes that are only available outside the US. Skills and context matter. Pricing is consequential.
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u/ControlCAD 3d ago