Samsung’s secret weapon finally lost its firepower

It was only a few years ago that the term OLED elicited excitement among consumers and investors.
Organic light-emitting diodes were the hippest new display technology because they offered better screen quality while using less power. Smartphone makers were keen to preach the technology’s virtues in order to juice sales.
When Apple Inc. finally joined the party in 2017, it used the iPhone X’s OLED display to help justify the product’s astronomical $999 price.
And at the center of the action was Samsung Electronics Co. The South Korean company virtually had the market cornered, being (for a while) the only manufacturer capable of churning out OLED displays reliably and at scale. Bottlenecks were cited as a reason for shortages in supply of that year’s iPhone.
That advantage seems to have disappeared; Samsung’s leadership in OLED, including newer flexible panels, hasn’t been enough to offset a decline in demand and competition from older, cheaper LCD technology. The result: Samsung’s display panel business posted its first operating loss in three years.
Watching this advantage slip away must sting.
In its investor presentation May 30, Samsung said that while demand for flexible OLEDs will improve, prices probably won’t. Instead, it will “focus on discovering new applications (notebooks, foldable devices, etc.) and securing stable demand.”
We already know what happens when Samsung pushes a use-case that’s just not ready for prime time. The Galaxy Fold was never going to be a big money-spinner, but it could have been a chance for Samsung to beat its chest once more. Its apparent failure is humbling.
A bigger concern is that executives appear to have been pushing a product that’s not ready from one division onto another that doesn’t really need it. It’s evident that the glory days of OLED are over, but that doesn’t mean Samsung should drag down one business just to try prop up another.

—Bloomberg