Apple, Huawei Join hands With BOE For Components, a Threat For Samsung

Samsung at exhibition

The market share of smartphones has been squeezed by many mobile phone brands around the world, and the supply of core components has continued to get narrowed. Samsung mobile phones have not only been blocked by external expansion, but even their domestic markets are raging.

Although Samsung’s mobile phone business has shown signs of recovery compared with the previous quarter, it has increased by 8 % from the previous quarter, but at the same time its panel business and core semiconductor business have been taken for the first time – all performance indicators have fallen for the past year. Most of the time, Samsung is really finding itself in quicksand, the more it tries to get out the more it gets trapped in.

According to Samsung’s first-quarter earnings report of 2019, revenues from major segments were $45.18 billion, and profits were $5.4 billion, down 13.5% as compared to last year; semiconductor business profits fell 64% to only $3.54 billion in profit; panel business -the loss was $480 million; the mobile business fell 40% as compared to last year, and the profit was reduced to $1.98 billion. The three major sectors have been reported an emergency.

Although the semiconductor and mobile businesses have fallen sharply in the three major businesses, they are still able to maintain profitability, which is much better than the panel business that turned into losses. As early as 2015, Samsung had turned off the LCD panel production line and turned to OLED LCD screen. Since then, Samsung has been responsible for the panel supply of most mobile phone manufacturers around the world.

Today, the continuous loss of customers has begun to shake the market position of Samsung’s leading panel. As a customer and a competitor, Huawei has turned its attention to the domestic panel manufacturer BOE(BOE Technology Group Co), and Apple has also included BOE in the procurement list.

This is another difficulty that Samsung has to face after the mobile phone business introduced in China. It can be seen that Samsung’s competitive resistance is gradually spreading to its global business. In addition to foreign troubles, the internal worries of the domestic market have never been broken. LG, which has been the main competitor has not yet stopped competing with Samsung.

Coupled with the gradual slowdown in the global color TV, mobile phone and other markets, Samsung’s panel business is suffering from unprecedented impact. If its panel business continues to be unable to get rid of the loss, then the panel business is likely to become the “discard” of the Samsung Group in case of dragging down other businesses and overall profits.

If it is in the market competition with Motorola and Nokia, it won’t be easy for it to sustain. Although Samsung’s OLED panel still has certain technological advantages at present, its innovation speed is obviously slower than that of the latecomers.

In recent years, Samsung has occupied the majority of market share in the market share of high-end OLED screens. Prior to this, due to limited product quality and technical level, the share of BOE in the market was small. However, with the cooperation of the two major mobile phone giants Huawei and Apple and BOE, this situation will likely change dramatically.

Although it cannot be concluded that BOE has completely surpassed Samsung at the technical level. Huawei mobiles phone and Apple Mobile Phones need to prove that BOE’s products have met assembly requirements and standards on the technical level.

Another point worthy of attention is that since Samsung has mastered almost all high-end OLED products market for a long time, the long-term market monopoly will inevitably lead to its absolute pricing power. So this time Apple will list BOE in the purchase list in order to beat Samsung to make it clear that it is impossible to cover the sky. Similarly, BOE can win these two big customers, and it will certainly make reasonable concessions in terms of price. Basically, it will be lower than Samsung.

In this case, whether Huawei or Apple’s mobile phone will decrease in terms of overall machine cost in the future, it should be conducive to consumers after the cost reduction. Especially as a domestic brand of Huawei. Because Huawei’s mobile phone can achieve today’s performance is mainly due to domestic consumers.

In addition, domestic OPPO, Vivo and other mobile phone manufacturers are bound to wait for opportunities or divert some of the procurement indicators to BOE, or directly cut off the supply relationship with Samsung. As a result, the supply price of Samsung’s panel will inevitably be lowered. It is difficult for Samsung’s panel business to regain its vitality. However, it does not rule out a price war between the two sides.

In addition to traditional OLEDs, folding screens are more important for Samsung, and BOE has achievements in this area. Therefore, under the current situation, the competition between the two sides is no longer a pure product technology, but the speed of production of new technologies.


[Blue Technology] Shuimu

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