The iPhone 8 is expected to be announced at a special media event on Sept. 12 and cost somewhere between $999 and $1,200 — but Apple isn’t entirely to blame for the exorbitant price.
You can direct at least some of your frustration to Apple rival and supplier Samsung, according to a new report from KGI Securities analyst Ming-Chi Kuo, who has a strong track record for predicting upcoming Apple releases.
The report, which was picked up by Apple Insider, claims Samsung’s role in the supply chain may be driving up prices for at least some components of the unreleased iPhone. The higher cost to produce each device would thus be passed on to customers.
The screen is the main reason for the price increase. The new iPhone is expected to be the first from Apple to OLED screens, instead of the LCD displays found in previous generations.
According to KGI Securities’ report, OLED displays produced by Samsung for the iPhone 8 will cost about $120 to $130 per unit, up from the $45 to $55 per unit cost of LCD panels in the past.
Unfortunately for Apple (and its legion of fans), there isn’t much the company can do to avoid this. Samsung is a major producer of OLED screens (its phones have used them for years), and Apple reportedly retained Samsung as the exclusive provider of the displays for the upcoming release. Samsung is thought to be on the hook for 160 million panels over the course of the deal.
That exclusivity allows Samsung to charge twice as much per unit as Apple paid for LCD panels from previous suppliers, according to Kuo’s report.
That premium is reportedly the main reason for the surging price of the iPhone. Other premium features like a facial-recognition sensor could contribute to the cost too — but Kuo claims that Samsung’s pricey OLED panels are the main culprit, and that Apple “is in urgent need of finding a second source.”
Those efforts may already be underway. Apple has reportedly started building a new facility for OLED R&D in Taiwan, and has enlisted LG Display as a supplier for 2018. Apple will also reportedly shift to an all-OLED iPhone lineup by 2018, so finding a new source to cut down on the price is a big deal.
This year, though, Samsung is calling the shots. That probably means you’ll have to fork over as much money for your shiny new iPhone as you would for a decent computer — but for some, having the latest and greatest from Apple is priceless.