Apple in the News: Taxes and OLED Screens

Apple Could Owe Ireland a Lot of Money

Apple is in the news a lot.  They’re a huge company, with a ton of assets, and have a market in just about every country throughout the world.  They are going to have enemies (just ask anyone that uses an Android how terrible they are).  Sometimes those enemies are the government.

Taxes and OLED Screens

Here’s the latest that we know on how this tech giant is faring.  Two seemingly unrelated stories that could actually be related.

The EU Claims Tax Evasion

The EU has recently labeled Apple’s deals with Ireland as a sweetheart tax arrangement.  They claim that for well over a decade the company has avoided paying their fair share, and are now ordering them to pay those taxes to the Irish government.  It should be noted that both Apple and the Irish government claim there was no wrongdoing, and deny anything is owed.

The amount: $15 billion.

A handsome sum for sure, but here’s a little bit of how that shapes up.  The company is currently worth north of $900 billion.  An added tax bill of $15 billion is roughly 1.6% of their assets.  In other words, it would be like most American families owing a couple extra thousand on their taxes.  Not fun to pay, but nowhere near devastating.

Apple will start paying into an escrow account while both the Irish government and the company appeal the decision.

Apple Negotiating Lower Priced OLED Screens

You may remember from last fall when we posted about how for every Apple phone sold, Samsung makes money.  Until Apple has their own factory built where they can make their own OLED screens, they have to buy them from Samsung.  That cost represents about a third of the cost to make every device, so getting a better deal is imperative to making more money.

Currently the screens are costing them about $110 each; they’re trying to work a deal where they can purchase them at $100 each.  $10 doesn’t seem like a big amount, but when you’re talking about the sale of 100 million screens, that’s a savings of $1 billion.  And that’s just for the 2018 year; next year will the savings be even greater?

Taxes and OLED Screens

Apple is very likely going to have to pay at least a part of that $15 billion tax bill.  At the very least, they need the cash to put into an escrow account that may, or may not, come back to them.  Earning an extra billion with savings on screens is a great way for them to knock down the impact, so don’t expect to see any savings on your 2018 devices.

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