WSJ: Apple Expects Lower-Priced LCD Models to Represent Majority of iPhone Sales in Upcoming 2018 Lineup

Apple is widely rumored to introduce three new iPhone models in September, including a second-generation iPhone X, a larger version dubbed the iPhone X Plus, and a lower-priced but lesser-featured version.


Given the iPhone X Plus is expected to have an OLED display, like the iPhone X, it would be reasonable to assume that the majority of iPhones that Apple plans to manufacture in 2018 will be of the OLED variety. According to The Wall Street Journal, however, that might not be how things play out.

The report cites sources involved with Apple's supply chain who claim that Apple now expects LCD models to make up the majority of iPhone sales in its upcoming lineup, expected to be released this fall.

Apple initially wanted roughly equal production of iPhone models with LCDs and OLED displays, but now plans to make more of the LCD model, referring to the rumored lower-priced, lesser-featured 6.1-inch iPhone, as it supposedly anticipates strong customer demand for the more affordable X-like model.

It's not entirely clear if "LCD models" will include iPhone 7, iPhone 8, and iPhone SE models, which will likely remain for sale alongside the 2018 iPhones, and would certainly help tip the scale towards LCD.

The Wall Street Journal says Apple's plans are a "sign of consumers' sensitivity to the price of smartphones," citing analysts who believe demand was weaker than their initial forecasts for the iPhone X "due mainly to its price tag." The flagship device is priced from $999 in the United States.

The report adds that Apple will likely retain at least one lower-priced, LCD-based iPhone in its 2019 lineup too, rather than shift entirely to OLED, to ensure customers have an affordable option to choose from.

A report out of Korea last month said Apple will switch to OLED for all of its 2019 iPhones, a claim that some analysts had already cast doubts on.

Apple analyst Ming-Chi Kuo, now with research firm TF International Securities, expects the next iPhone X to start at $800-$900, the so-called iPhone X Plus to start at $900-$1,000, and the 6.1-inch iPhone to start at $600-$700 in the United States, with orders for all three beginning in September.

Kuo has previously said the 6.1-inch iPhone will have a nearly edge to edge display, with a notch for Face ID, but with tradeoffs, including an LCD instead of OLED display, an aluminum frame rather than stainless steel, no 3D Touch, and a single-lens rather than dual-lens rear camera system.

If accurate, many customers may indeed opt for what is essentially a budget iPhone X, with a $300 to $400 cheaper price tag. That doesn't mean the current iPhone X was too expensive, though, as in February, Apple said it was the "top selling iPhone" every week since it launched in early November.

Related Roundup: 2018 iPhones
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Apple Teaming Up With Goldman Sachs for Apple Pay-Branded Credit Card

Apple is teaming up with investment bank Goldman Sachs for the launch of a new joint credit card that would be placed under the Apple Pay branding. The card could launch as soon as early 2019, according to The Wall Street Journal.

At the same time, Apple would end its partnership with Barclays, which offered customers an Apple rewards program and financing deals through a Barclaycard Apple Rewards Visa. For the new Goldman partnership, which will replace the Barclaycard, the bank is set to offer in-store loans to Apple customers buying iPhones and other Apple products.


Other specifics of the deal are still being decided upon, people familiar with the matter said, mainly including the terms and benefits of the planned credit card, "including the perks for customers." The Barclays/Apple card currently offers interest-free financing on Apple devices and points toward Apple gift cards.
Apple Inc. and Goldman Sachs Group Inc. are preparing to launch a new joint credit card, a move that would deepen the technology giant’s push into its customers’ wallets and mark the Wall Street firm’s first foray into plastic.

The planned card would carry the Apple Pay brand and could launch early next year, people familiar with the matter said.
Apple is believed to be adding more focus onto its growing services business, which Apple Pay is part of, and the Goldman Sachs partnership could be a way for the company to spread even more awareness of the digital wallet. In a report on Apple Pay adoption by Loup Ventures earlier this year, 16 percent of global iPhone owners were said to have activated Apple Pay. The researchers estimated widespread adoption for the service at 3-5 years from now, "given integration OS and iOS makes it the easiest to use digital wallet."

Apple first debuted Apple Pay in the fall of 2014, and although many retailers joined in support of the platform it has faced push back from companies like Target and Walmart as each try to develop their own digital wallet service. Last spring, Apple said it wasn't worried about the slow adoption of Apple Pay because it saw the mobile wallet as on track to soon become its customers' "primary payment system."

Related Roundup: Apple Pay

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Apple Will Start Paying Ireland Billions Owed in Back Taxes ‘Early Next Year’

In August 2016 the European Commission ruled that Apple must repay 13 billion euros ($15.46 billion) in back taxes dating between 2003 and 2014. According to the EU, the taxes were avoided with the help of sweetheart tax deals from Ireland, and today The Wall Street Journal reports that Apple will now begin paying these back taxes "as soon as early next year."

Ireland's Finance Minister, Paschal Donohoe, reports that Apple and Ireland have agreed to terms of an escrow fund for the money, setting a pace for Apple to begin repaying the taxes in Q1 2018. Apple's payment will sit in the escrow fund while both sides continue to appeal the EU's decision in court.

In October 2017, the EU announced its intention to take Ireland to court for its failure to recover Apple's back tax sum, with Ireland citing the escrow account as the reason why negotiations and repayment were being held up. Now, Donohoe said the next steps will be to determine who operates the escrow account and who manages the fund once Apple begins the repayment process. The EU said that it will only close court proceedings against Ireland once Apple's back taxes are recovered in full.
Ireland will begin collecting €13 billion ($15.46 billion) in back taxes from Apple Inc. as soon as early next year after both sides agreed to the terms of an escrow fund for the money, Ireland’s finance chief said Monday.

In a statement, Apple said, “We have a dedicated team working diligently and expeditiously with Ireland on the process the European Commission has mandated. We remain confident the General Court of the EU will overturn the Commission’s decision once it has reviewed all the evidence.”
The center of the EU's argument is that Irish revenue commissioners gave Apple unfair advantages between 1991 and 2007 by allowing the company to move income from the European market through two "non-resident" head office subsidiaries based in Ireland.

Ireland's government has stated it "fundamentally disagrees" with the EU's analysis of the tax situation, leading to its appeal. For Apple, the company said that the EU made "fundamental errors" in the calculations related to the taxes it owes, arguing that the bulk of the profits during this period are due in the United States. Apple CEO Tim Cook put it more succinctly after the first ruling came out, calling the tax avoidance claims "total political crap."

Note: Due to the political nature of the discussion regarding this topic, the discussion thread is located in our Politics, Religion, Social Issues forum. All forum members and site visitors are welcome to read and follow the thread, but posting is limited to forum members with at least 100 posts.


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WSJ Says iPhone X’s Production Issues Due to Fewer ‘Romeo’ Than ‘Juliet’ Modules

The Wall Street Journal reports that iPhone X production issues were due to a supply imbalance of components dubbed Romeo and Juliet.


The report, citing people familiar with the situation, claims it has taken more time to assemble the Romeo module than the Juliet module, both part of the iPhone X's new TrueDepth facial recognition system for Face ID.

The so-called Romeo module reportedly includes the dot projector that beams more than 30,000 invisible dots to create a precise depth map of your face, while the Juliet module includes the infrared camera that analyzes the pattern.

Earlier this week, both KGI Securities analyst Ming-Chi Kuo and sources speaking with Nikkei Asian Review said the TrueDepth system has indeed been a significant bottleneck for Apple suppliers manufacturing the iPhone X.

One of The Wall Street Journal's sources said the assembly process is now moving smoothly, but the production issues add to concerns about extended shortages when iPhone X sales begin in early November.

iPhone X pre-orders begin October 27, and the device officially launches November 3.

Related Roundup: iPhone X
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