Samsung to Slash OLED Panel Production on ‘Weak Demand’ for iPhone X, Claims Nikkei

Samsung plans to slash its OLED panel output in response to Apple's decision to cut production of iPhone X due to "weak demand", the Nikkei Asian Review reported on Tuesday. Samsung will make OLED panels for 20 million fewer iPhones at its South Chungcheong plant in the January to March quarter, a lot lower than its original goal of supplying panels for 45 million to 50 million iPhones, according to the paper.


Samsung is said to have made a 13.5 trillion won ($12.6 billion) capital investment in anticipation of the originally expected number of OLED panel orders from Apple. The new target reportedly reduces plant production to roughly 60 percent of original forecasts, and Samsung's display business is expected to suffer revenue declines for the first half of 2018. Samsung stock fell as much as 2.3 percent in morning trade, reported Reuters, while shares of some Japanese OLED component makers also declined.

Today's report follows previous claims by Nikkei that "weak demand" for iPhone X has forced Apple to slash its production target by half in the three month period from January. However the claim doesn't tally with Apple's own results reported at its recent quarterly conference call earlier this month, and it's unclear which supply chain sources the publication is relying on. Apple CEO Tim Cook has dismissed these types of reports in the past, suggesting that the company's supply chain is very complex and that any singular data point is not a reliable indicator of what's actually going on.

During its record financial results report for the first fiscal quarter of 2018 (which corresponds to the fourth calendar quarter of 2017), Cook said the iPhone X was the top-selling iPhone model every week since it had debuted in November. iPhone shipments were down 1.2 percent year-over-year compared to the year-ago quarter, but only because of an extra sales week last year – Apple's growth was actually 21 percent year-over-year on an adjusted basis.

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Barclays Says Second-Generation iPhone X Could Have Smaller Notch

Apple will launch a trio of new iPhone models later this year with a second-generation TrueDepth camera system, which will potentially be reduced in size, according to a research note issued today by analysts Andrew Gardiner, Hiral Patel, Joseph Wolf, and Blayne Curtis at investment bank Barclays.


While the analysts believe the new TrueDepth system will only "evolve slightly," they predict it could allow for a "smaller notch" on the 2018 range of iPhones with Face ID, which is rumored to include a second-generation iPhone X, a larger iPhone X Plus, and an all-new mid-range 6.1-inch LCD model.

MacRumors obtained a copy of the research note, which also corroborates rumors about Apple extending Face ID to the iPad Pro this year:
Based on several data points within the 4Q17 reporting period and our supply chain meetings at CES, we remain confident that Apple is set to deploy its TrueDepth 3D sensor across the iPhone range in 2018 and to also add it to the pending iPad Pro refresh as well.

Given the complexity and multiple years spent developing the current generation of module, combined with supplier comments over the past month regarding multi-year customer commitments, we do not envisage a major change to the architectural make-up in 2018 […]

We do expect the sensor to evolve slightly, potentially reducing in size (i.e., smaller notch) and improving in specificity […] helping to further drive very strong growth [for some Apple suppliers] in 2H18 as the second generation of sensor ships in this year's new iPhones.
A smaller notch would be a welcomed change for critics of the iPhone X design, but it remains to be seen if it will happen so soon. An earlier rumor suggested the notch won't be reduced in size until 2019 or later, and it's generally expected that 2018 iPhones will look virtually identical to the iPhone X.

The prevailing thought is that Apple doesn't want to deal with the type of delays it faced with the iPhone X last year, and by keeping the hardware relatively unchanged, suppliers could avoid some retooling. However, it's certainly possible the TrueDepth camera system could be slightly shrunk down this year.

Beyond this year, the Barclays analysts believe Apple is "working hard" on a rear-facing TrueDepth camera system for future iPhones. The technology could be ready by 2019, but it sounds too far out to know for certain.
A key discussion point regarding 2019 is whether or not Apple will be ready to insert a rear or world-facing sensor, given the additional complexity associated with a greater range and field of view and […] the potential safety implications for the human eye.

Our discussions with suppliers suggests Apple and its partners are working hard on a world-facing solution, but development is ongoing and with over 18 months to go until the 2019 iPhone cycle, not all is yet determined.
The rear-facing TrueDepth camera system would pave the way for expanded augmented reality capabilities on iPhones. Apple has repeatedly expressed a profound interest in augmented reality, and recently highlighted some use cases of the technology in areas like education and gaming with a new page on its website.

Bloomberg News previously reported that Apple is exploring rear-facing 3D sensing, to be added to iPhones as early as 2019, while KGI Securities analyst Ming-Chi Kuo agrees the technology won't be ready in 2018, so there does appear to be consensus about back-and-front TrueDepth being a next-year feature.

Apple's trio of new iPhones should be announced in September as usual, while the new iPad Pro with Face ID could debut in June.

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KGI: Apple Could Ship 100 Million Units of New 6.1-inch LCD iPhone, Replacing iPhone 8 and 8 Plus in 2018 Device Line-up

KGI Securities analyst Ming-Chi Kuo today shared shipment projections with MacRumors for Apple's rumored 6.1-inch iPhone that he expects to launch in the second half of 2018.

The device is said to have some iPhone X features such as Face ID, but design compromises will enable Apple to put it at a more affordable price point. They could include an LCD screen instead of an OLED display, an aluminum frame, a single lens camera, and no 3D Touch.

We project shipments under the new product life cycle (4Q18-3Q19) for the 6.1" LCD iPhone, estimated to be launched in 2H18, will reach around 100mn units.
According to Kuo's research note, shipment projections could fluctuate depending on the selling price of the 6.1-inch LCD iPhone, which Kuo believes will be somewhere between $700 and $800 in the United States. In his analysis, shipments will be around 105-115 million units when priced at US$699, and 95-105 million units when priced at US$799.

The price could also depend on "whether Apple ultimately sees the new 6.1-inch LCD model as the successor of iPhone 8 or 8 Plus," according to Kuo. In a previous note, KGI Securities has said the 6.1-inch iPhone will have a standard non-stacked logic board and rectangular battery pack like the iPhone 8 and iPhone 8 Plus.

Kuo expects the 6.1-inch LCD iPhone to account for around 50 percent of the new iPhone line-up's shipments, with sales remaining strong into 2019. On that basis, today's shipping estimate suggests lifetime sales of 2018 iPhones could reach approximately 200 million units.

The device is expected to be announced around September-October as usual alongside a new 5.8-inch iPhone X and a larger 6.5-inch version dubbed iPhone X Plus.

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Apple Adds Chinese Firms to its Pool of 3D Sensing Module Suppliers for 2018 iPhones and iPads

Apple will work with two Chinese suppliers in 2018 to ensure a stable supply of 3D sensing modules for use in this year's iPhone and iPad line-up, according to a report on Thursday by ET News.


Last month The Investor claimed Apple was planning a $820.9 million investment in LG Innotek to secure supply of 3D sensing modules, which are key components of the iPhone X's new TrueDepth camera system, enabling features such as Face ID and Animoji.

However, according to today's report, Apple has selected two Chinese companies to shore up supply. One is said to be an emerging supplier amongst smartphone part markets, and the other is a popular semiconductor packaging company. Nevertheless, LG Innotek is expected remain the biggest main vendor out of the three module suppliers, while the two Chinese companies will provide the rest.

Apple plans to launch a refreshed iPhone X, a larger iPhone X Plus, and a mid-range iPhone each with Face ID later this year, according to KGI Securities analyst Ming-Chi Kuo. Apple will also release at least one iPad Pro model with Face ID this year, according to Bloomberg.

It's unusual for Apple to source Chinese suppliers for key parts, but the additional help could mean Apple avoids the temporary supply chain issues it experienced with 3D sensing modules late last year.

In addition, the extra supply could benefit Apple in the long term if it looks to combine the front-facing camera and Face ID on future iPhones, as claimed by ETNews back in January.

According to the report, industry sources claim Apple's plan to combine these features would increase the number of parts used in iPhones, however it's unlikely we'll see such a design this year, given that the 2018 line-up of iOS devices are expected to have the same TrueDepth sensor housing as the iPhone X.

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Apple in Talks With Goldman Sachs Over Potential iPhone Buyer Finance Options

Apple is in talks with its investment bank Goldman Sachs about the possibility of offering customers financial loans when buying Apple products, according to a report by the Wall Street Journal on Wednesday.


The Wall Street firm is in talks to offer financing to shoppers buying phones, watches and other gadgets from Apple, people familiar with the matter said. Customers purchasing a $1,000 iPhone X could take out a loan from Goldman instead of charging it to credit cards that often carry high interest rates.
Talks between Apple and Goldman Sachs remain at an early stage and could still fall apart, according to WSJ. Both the tech giant and the investment bank declined to comment for the report.

In September 2015, Apple partnered with Citizens Financial Group to offer customers zero-interest loans for iPhone upgrades and higher-interest options for other device purchases. Part of Goldman's discussions with Apple are said to involve taking over some form of Apple's iPhone upgrade program.

Apple's upgrade program is designed for users who want to have the newest iPhone every year, and comes with AppleCare+ included. Those who sign up for the program can trade-in their current iPhone for a new model after 12 monthly installments are made, starting a new cycle of the program each year. Apple started the program around the same time that wireless providers began reducing buyer subsidies for iPhones.

Goldman Sachs is said to view the potential partnership as a way of growing its new consumer bank, as it looks beyond corporate clients to more fully embrace retail banking and consumer lending. Two years ago the investment firm launched Marcus, an online lender that helps people refinance credit-card debt, while the bank is also building a "point-of-sale" financing business that will offer loans to shoppers at checkout, according to people familiar with the firm who spoke to WSJ.

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KGI Expects Intel to Be Exclusive Supplier of Modems in 2018 iPhones

Intel could be the exclusive supplier of LTE modems for all new iPhones launched in 2018, according to KGI Securities analyst Ming-Chi Kuo.


The key takeaway of the research note, obtained by MacRumors:
We expect Intel to be the exclusive supplier of baseband chip for 2H18 new iPhone models, while Qualcomm may not have a share of the orders at all.
Kuo previously expected Intel to supply 70 percent of the modems, with Qualcomm providing the remaining 30 percent of orders, but he now believes Intel will be the sole supplier given several competitive advantages.

First and foremost, Intel's latest XMM 7560 modem [PDF] supports both GSM and CDMA, meaning that Apple could release a single iPhone model that works across AT&T, Verizon, T-Mobile, and Sprint. Intel modems previously lacked CDMA, meaning Apple could never fully ditch Qualcomm for all iPhone models.

Apple is also embroiled in a major lawsuit with Qualcomm over anticompetitive licensing practices, and Kuo believes the iPhone maker switching to Intel as its exclusive modem supplier will place added pressure on Qualcomm.

Kuo added that it's too early to tell if Intel will be able to maintain its position of exclusivity in the future, as Apple typically prefers to diversify its supply chain. He adds that Apple may give orders to Qualcomm again in exchange for concessions in the ongoing lawsuit between the two companies.

In order to make up for the lost iPhone business, Kuo expects Qualcomm will be more aggressive in securing orders from Chinese smartphone makers. However, he believes these Chinese companies don't want a monopolized market, so Qualcomm's ability to gain market share in the country may be limited.

Kuo also reiterated that LTE transmission speeds will increase significantly in new iPhone models released in the second half of 2018.

In a previous research note from November, Kuo highlighted that Intel's XMM 7560 modem supports 4x4 MIMO technology, compared to only 2x2 MIMO in the iPhone 8, iPhone 8 Plus, and iPhone X. The faster LTE speeds will also be made possible by an upgraded antenna design in the next iPhones.

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Apple’s Decision to Slash iPhone X Production Volume in Q1 2018 Could Delay Future OLED Models

Apple is set to halve its 40 million iPhone X production target in the three month period from January, reported Nikkei Asian Review on Monday without naming a source.


The U.S. tech giant notified suppliers that it had decided to cut the target for the period to around 20 million units, in light of slower-than-expected sales in the year-end holiday shopping season in key markets such as Europe, the U.S. and China.

The iPhone X, Apple's first smartphone equipped with an organic light-emitting diode display, has failed to catch on globally -- something many put down to a price tag starting at $999.
Part of the reason for the high price tag of iPhone X is said to be down to the cost of OLED panels made by Samsung, which is the only supplier of the component that can guarantee Apple a steady supply of the screens. According to Nikkei, Apple is now considering an increase to the proportion of LCD iPhone models by reducing production of the OLED screen models scheduled for release this year.

Apple is expected to launch a trio of new iPhone models in 2018, including 5.8-inch and 6.5-inch models with OLED displays and a 6.1-inch model with an LCD display, according to respected KGI Securities analyst Ming-Chi Kuo. However, at least one other analyst has predicted that the LCD-to-OLED ratio this year will actually be 2:1.

DigiTimes' Luke Lin believes Apple is increasingly leaning towards releasing two LCD-based models and a single larger 6.4- to 6.5-inch OLED model. Indeed, today's Nikkei report claims lackluster sales for iPhone X could actually result in a delay to the company's plans to introduce OLED screens in other models, potentially adding weight to DigiTimes' prediction.
The production cuts for the X will have a domino effect on manufacturers that have supplied high-performance components for the handset, with the combined impact expected to run into billions of dollars. It could also slow down the shift at display manufacturers from LCD to OLED technology.
Nikkei added that Apple is expected to maintain a total production target of 30 million units for lower priced models such as the iPhone 8, iPhone 8 Plus and iPhone 7. Apple Japan replied to Nikkei's request for comment by stating that it would confirm the details with headquarters.

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KGI Shares Latest on 6.1-Inch iPhone, Next iPhone X and iPhone X Plus to Have 4GB of RAM and Two-Cell Batteries

KGI Securities analyst Ming-Chi Kuo, who often relays information gathered from sources within Apple's supply chain in Asia, today shared a trio of new research notes that outline both new and existing predictions about the new iPhone X, iPhone X Plus, and lower-priced 6.1-inch iPhone expected later this year.

iPhone X Plus dummy model versus current iPhone X via Ben Geskin

MacRumors obtained a copy of each research note, and we've rounded up the key points. More details are available in our 2018 iPhones roundup.

All-New 6.1-inch iPhone with LCD


New:
• Taiwanese manufacturers Pegatron, Foxconn, and Wistron will be the key assemblers of the 6.1-inch iPhone, with 60 percent, 30 percent, and 10 percent allocation of EMS respectively
• Japan Display will supply around 70 percent of LCD panels for the 6.1-inch iPhone. Rumors suggest Apple will use Japan Display's six-inch Full Active LCDs that only require ultra-slim 0.5mm bezels on all four sides

Reiterated:
• Nearly full screen design with no home button and notch for TrueDepth sensors
• 3D sensing for Face ID and Animoji
• Rectangular-shaped, one-cell battery with 2,850-2,950 mAh, up to 8.5 percent larger than current iPhone X. The increased capacity will be the result of a smaller logic board given manufacturing advancements
• Lower price point: starting at between $700 and $800 in the United States

The rumored 6.1-inch iPhone is shaping up to be a lower-priced iPhone X with some design compromises, which Kuo previously said will include an aluminum frame, a lack of 3D Touch, a single rather than dual lens rear camera, and 3GB of RAM, which will be less memory than other new 2018 iPhones have.

Next-Generation iPhone X and iPhone X Plus


According to Kuo, the second-generation iPhone X and a larger 6.5-inch version we're calling iPhone X Plus will each have an increased 4GB of RAM. Unsurprisingly, given its larger physical size, the iPhone X Plus is also expected to have up to a 25 percent larger battery capacity of 3,300-3,400 mAh vs. iPhone X.

Kuo adds that Apple has settled on a two-cell, L-shaped design for the second-generation iPhone X and iPhone X Plus battery, compared to a single-cell, L-shaped design that could have yielded up to 10 percent additional capacity.

By the sounds of it, the new iPhone X and iPhone X Plus, beyond the latter's larger screen size, won't be significant upgrades. Kuo doesn't expect improvements to be made to the TrueDepth camera system until 2019. Nevertheless, he expects the devices to sell well, especially the lower-priced 6.1-inch iPhone.

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Apple’s New 2018 iPhone Line-up May Consist of Two Phones With LCD Displays and One Larger OLED Model, Claims Analyst

Apple could release just one new OLED-based iPhone alongside two new iPhone models with LCD displays this year, according to a new report today. Previous reports have gravitated towards the view that Apple will launch two new 5.8-inch and 6.5-inch OLED iPhone models and only one 6.1-inch model with an LCD display.

However, Digitimes Research senior analyst Luke Lin believes Apple is increasingly leaning towards releasing two LCD-based models – one between 5.7-inch and 5.8-inches, and another between 6.0-inches and 6.1-inches. Lin also claims the 6.1-inch OLED device Apple is testing is falling out of favor, and the company sees more of a future in a larger 6.4- to 6.5-inch OLED model it is also testing.

Apple originally intended to push the two OLED iPhones and the 6.0- to 6.1-inch LCD iPhone, but has recently started leaning toward the combination of the two LCD models plus the 6.4- to 6.5-inch OLED iPhone, abandoning the 6.0- to 6.1-inch OLED model.
Such a line-up would be similar to the iPhone range Apple launched last year: Two LCD-based devices in the iPhone 8 and iPhone 8 Plus, and the OLED-based iPhone X. Lin believes the four iPhone projects Apple is working on all support wireless charging and 3D sensing functionalities. However, Lin believes Apple has not yet made a final decision on the combination, so the 2x OLED/ 1x LCD iPhone line-up predicted by KGI Securities analyst Ming-Chi Kuo could still play out.

Taiwan-based website DigiTimes has a mixed track record at reporting on Apple's upcoming product plans, but its sources within the upstream supply chain have proven reliable in the past. However, its in-house research arm remains an unknown quantity, so we remain guarded on the accuracy of this prediction going forward.

Earlier this week, Taiwan's Commercial Times added to the speculation by claiming Apple's rumored 6.1-inch LCD iPhone will use Japan Display's so-called "Full Active" LCD technology, enabling it to have a taller display and ultra-slim 0.5mm bezels on all four sides, making them smaller than those on the iPhone X.

Also today, Digitimes analyst Lin claimed Apple is working on a new entry-level smartphone model similar to the iPhone SE that will support wireless charging and be ready for launch in May or June.

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‘iPhone SE 2’ With Wireless Charging Said to Launch in May or June

Apple is reportedly working on a new entry-level smartphone model similar to the iPhone SE that will support wireless charging and be released in time for summer 2018.

The prediction comes from Digitimes Research analyst Luke Lin, who believes that Apple's iPhone SE successor will have a glass back similar to the iPhone 8 series and iPhone X, but will lack the 3D sensing capabilities of the latter model.

For the entry-level sector, Apple is preparing a new inexpensive smartphone similar to the iPhone SE for 2018, featuring the wireless charging functionality, but not 3D sensing. The smartphone will begin mass production in the second quarter with the official launch in May or June, Lin noted.
Taiwan-based website DigiTimes has a mixed track record at reporting on Apple's upcoming product plans. Its sources within the upstream supply chain have proven reliable in the past, but predictions from its research analysts are harder to gauge.

Lin doesn't specifically mention the size of the new entry-level model, but the details match up with previous rumors about a forthcoming four-inch 'iPhone SE 2' with a glass back, although earlier speculation said the device would ship in the first quarter of 2018, rather than the second quarter.

Rumors about a the specifications of Apple's next small form factor smartphone appeared in August last year, when Indian tech website Tekz24 claimed Apple's next iPhone SE model would have an A10 Fusion chip, 2GB of RAM, and 32GB and 128GB storage capacities, and a slightly larger 1,700 mAh battery.

In November, China's Economic Daily News claimed Apple's second-generation iPhone SE was set for the first half of 2018 and would be assembled by Wistron at its factory in Bengaluru, India, where some assembly of the current iPhone SE occurs. Taiwanese market research firm TrendForce also recently predicted that Apple is planning to launch a second-generation iPhone SE in 2018 to target the mid-range smartphone market.

Apple hasn't properly refreshed the iPhone SE since it launched back in March 2016, but it did double the available storage capacities to 64GB and 128GB in March 2017. Apple has confirmed an AirPower wireless charging mat will be released sometime this year for Apple Watch and iPhone models with a wireless charging feature.

Related Roundups: iPhone SE, 2018 iPhones
Buyer's Guide: iPhone SE (Don't Buy)

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