Apple Needs to Start Moving iPhones or It Might Owe Samsung Money

Apple might be cutting a big check to rival Samsung pretty soon if it doesn’t start selling more devices with OLED screens.

That’s because the company is apparently falling short of contractual obligations with regard to how many screens it said it would purchase and the penalties for this are pretty expensive – about $USD 86 million depending on the exchange rate. So what exactly made Apple agree to such a thing?

Well, it all goes back to the Cupertino company’s insistence that Samsung build a plant just for the manufacture of OLED screens that Apple could use for its products and, as logically follows, when sales of iPhones slowed down so, too, did activity at this plant. Just goes to show you that, aside from the smartphone marketing hype, these two firms work together on a lot of projects.

ZDNet points out that it is unlikely that Apple will actually pay cash to Samsung but will, instead, offer the company compensatory contracts that use its components on other Apple products.

ZDNet further points out that it is not uncommon for these kinds of clauses to exist in business agreements and that, in fact, Apple charge Samsung with a few breaches of its agreement for “production bottlenecks” some time back.

All of this is playing out on a backdrop of the trade war between the United States and China with analysts proclaiming that Apple could face even more serious setbacks in the future when it comes to its iPhones if sanctions similar to those imposed on Huawei happen. It’ll be interesting to see what will happen in that eventuality.

If you haven’t kept up with that story, you can read up about Huawei here.

As always, we’d love to know your thoughts in the comments below.

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[ZDNet]