UBI Research: Smartphone OLED prices to fall due to oversupply and fallen demand

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Coronavirus has had a huge impact on every business. No sector is left untouched from the impacts of Covid 19. The smartphone market is no different. One of the UBI research reports says that the prices of OLED panels will soon fall due to extreme oversupply. According to the analysts, there are two major reasons behind this prediction of the fall in OLED prices. Firstly, the coronavirus pandemic and secondly, the sanctions levied by the United States of America against Huawei. 

The Covid-19 lockdown and less disposable income with the customers led to the fall in the demand for OLED panels. The global smartphone market saw a slowdown like never before. The data states that there was a 17.9% downfall in the OLED displays shipments in the third quarter of 2020 when compared with the same period last year. A total of 113 million smartphones with OLED displays were shipped in Q3FY20.

The UBI Research CEO Choong Hoon Yi expects that the market will follow a similar trend in the fourth quarter of this year. That means another quarter where the demand for OLED panels will continue to fall. As smartphones are still being manufactured at the same pace, lesser demand and more supply will only decrease the prices further. 

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Coming to the second reason, Huawei’s smartphone business is in continuous decline since last year. In the second quarter of this year, they shipped around 53.4% of the total OLED smartphones in China. Huawei’s competitors like Oppo (18.6%) Xiaomi (14.8%) and Vivo (8.3%) account for a lesser share percentage even if we combine the three against Huawei. But the market estimates that the Chinese tech giant is only expected to ship 50 million smartphones in 2021. This means that their dominance in the OLED market is bound to falter.

On the other side, Apple has thought of including OLED panels in its latest iPhone lineup. Currently, around 50% of the iPhones are said to use OLED panels. This will increase to 75% and then to 100% in 2021 and 2022 respectively. The brand Apple has been gaining the market due to its featured products and positive brand image. 

Source 1, 2

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Sanidhya Bhardwaj
A football lover who is doing an MBA in finance and currently covering every news related to smartphones. I believe in diversification, both, in life and in my trading portfolio. Do check out my blogs to be aware of the recent happenings around you!

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