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Apple might owe Samsung big after failing to sell enough iPhones

It didn't buy enough OLED screens from Samsung Display, according to ETNews.

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Disappointed iPhone XS sales may have hurt Apple's relationship with its display supplier.

Angela Lang/CNET

Apple could owe Samsung Display "hundreds of billions of won" in penalties for not buying enough OLED screens -- found in iPhone XS, XS Max and X -- due to lackluster iPhone sales, according to Korean outlet ETNews. That'd be about $90 million in fines, which isn't much to Apple, but could strain on its relationship with the supplier.

The Cupertino, California giant insisted that Samsung Display build a factory for the exclusive purpose of making OLED screens, saying it'd need 100 million iPhone displays a year, our sister site ZDNet noted. The weak sales hit Samsung Display hard -- causing operating profits to fall from 5.7 trillion won (around $4.9 billion) in 2017 to 2.62 trillion won (about $2.2 billion) in 2018.

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It's unlikely that Apple will pay a cash penalty, but offer Samsung Display fresh contracts for OLED screens in tablets and notebooks, according to ETNews. 

Apple is also rumored to be moving to an all OLED line-up for 2020, after last year's budget iPhone XR stuck with the old LCD display.

Samsung declined to comment on the story, while Apple didn't immediately respond to a request for comment.

First published at 3:23 a.m. PT.
Updated at 9:12 a.m. PT: Adds that Samsung declined comment.