Apple inks 5-year, $500 million display deal with LG

[AppleInsider]

Apple has entered into a strategic, long-term agreement with LG Display Co. for the supply of flat panel displays through the year 2013, according to regulatory filings made Monday with Securities and Exchange Commission.

The deal will see Apple prepay $500 million to the South Korea-based electronics manufacturer sometime this month in exchange for a guaranteed supply of LCD screens for Macs and/or handheld products over the next 5 years.

LG, which sits behind Samsung as the world's second-largest maker of flat panel displays, already supplies Apple with 70 percent of its LCD panels, HI Investment & Securities analyst Park Sang-hyun told Reuters. He expects prices for the parts, which have been falling rapidly during the recent global slowdown, to pick up in the near future.

The strategic agreement between Apple and LG is reminiscent of a similar deal forged between the iPhone maker and five memory suppliers back in 2005, which has afforded the Cupertino-based firm a competitive edge in the digital media player and cell phone markets.

Under the terms of that deal, Apple prepaid a total of $1.25 billion to Hynix, Intel, Micron, Samsung Electronics and Toshiba in order to secure an ample supply of NAND flash memory through 2010.

By padding its memory suppliers with funds up front, it's believed that Apple was also able to obtain more favorable pricing on the components, which has helped it apply margin pressure to rival media player and cell phone makers who've struggled to offer similar storage capacities in their competitively-priced offerings.

[ View this article at AppleInsider.com ]

[Bergermeister]

Now maybe I can expect a new 23" LCD Cinema Display.

[gastroboy]

Originally Posted by Bergermeister

Now maybe I can expect a new 23" LCD Cinema Display.

Going by the quality of their flat panel TVs, I think Samsung has the edge in quality over LG.

So I bought a Sony :-) which was stand out tops.

Does anyone know of a website where monitors are tested?

[wizard69]

Originally Posted by Bergermeister

Now maybe I can expect a new 23" LCD Cinema Display.

Actually I'm hoping that this is a sign that more than the Cinema displays are coming. New iMac should be high on the list.

I'm also hoping that maybe this might be a hint at a Cinema display with a built in TV tuner. This could really add value to Apples expensive products and makes a lot of sense on larger high resolution displays. The trick of course is to avoid compromising the quality of either input signal. Let's face it if you shell out multiple thousands of dollars for let's say a 30" screen you want that screen to be as functional as possible.

I also take an interest in the mention of the smaller displays. One way to look at this is that this foretells a handheld product from Apple that isn't on the market yet.


Dave

[robb01]

Originally Posted by Bergermeister

Now maybe I can expect a new 23" LCD Cinema Display.

That'd be fantastic if they did

_____________

[F1Turbo]

- Updated 30" with LED?
- matte/non-glossy laptop screens in something besides gargantuan 17"?

[bloggerblog]

This deal is very coincedential since according to MacNN's report last week, LG is planning to sell their TVs with NetFlix built in them. So I'm hoping that this deal is to influence that decision and maybe have LG sell their TVs with Apple TV built in them instead.

[lepton]

Hey, guess what? LG is a big player in the emerging OLED market.

Check out the LG announcements, they are putting out a 15" OLED panel starting about now. Think about that in the lid of a MacBook Air, making it a quarter of an inch thinner, lower power, brighter even in sunlight, 180 degree viewing angle...

And with lifetime and the blue color problems just about solved for good, this is the time.

Here is what else will happen: OLED in the iPhone, iPod Touch, and NetPad! Maybe even this Summer. Thinner, lighter devices at lower power. What's a NetPad? My prediction for Apple's next new device, not a netbook, not exactly a tablet, flat with a 7.75" screen. I have a detailed article at myallo.com/blog

OLED is where Apple will go, as prices come down.

[8CoreWhore]

"By padding its memory suppliers with funds up front, it's believed that Apple was also able to obtain more favorable pricing on the components..." Ya, think?

[solipsism]

Originally Posted by Bergermeister

Now maybe I can expect a new 23" LCD Cinema Display.

Considering that they have a new 24" display, I doubt that they would offer another model with only a 1" difference.

Originally Posted by bloggerblog

This deal is very coincedential since according to MacNN's report last week, LG is planning to sell their TVs with NetFlix built in them. So I'm hoping that this deal is to influence that decision and maybe have LG sell their TVs with Apple TV built in them instead.

That would be interesting and the only way Applecould get its AppleTV into a variety of TV types and sizes.

[Alonso Perez]

Originally Posted by lepton

Hey, guess what? LG is a big player in the emerging OLED market.

...

OLED is where Apple will go, as prices come down.

I agree. I think most people don't understand the significance of OLED yet. Apple, because it sells higher-priced products, will be able to introduce OLED earlier than cut-rate commodity PC producers. A contract like this can only help further that along.

OLED could make the Air thinner, but I think an even better use would be to give it a larger screen using the current cover. With OLED, a 14.1" screen would fit easily, and draw less power.

A curious thing about OLED is that we go back to one CRT characteristic, where dark images use less power (this doesn't happen with LCD), so a very low power draw could be achieved with the screen on; for instance a screensaver app showing a small clock moving around the screen.

In the handheld space, OLED will have a huge impact.

[iReality85]

Originally Posted by lepton

Hey, guess what? LG is a big player in the emerging OLED market.

Check out the LG announcements, they are putting out a 15" OLED panel starting about now. Think about that in the lid of a MacBook Air, making it a quarter of an inch thinner, lower power, brighter even in sunlight, 180 degree viewing angle...

Here is what else will happen: OLED in the iPhone, iPod Touch, and NetPad! Maybe even this Summer.

I wouldn't bet on it. Maintream OLED is still at least a couple years away. Sony's 11" OLED panel is still retailing for a cool $2,500, and LG's 15" is sure to garner more. Plus, Sony demo'ed a 27" OLED panel at CES (enormous for OLED at this point in time, but still quite small for panel sizes), and their response was basically no one could dream of affording this right now- it is only on display as a glimpse of things to come. Even at sizes like those of the iPhone, an OLED LCD screen would jack up the retail price tremendously...

[iVlad]

Apple is so smart with its money. I really like how they think ahead...way ahead.

Maybe Apple TV will be actual TV? 32", 47" 56" perhaps

If Apple goes OLED, its gonna be the end to all other competitors for sometime.

[Johnny Mozzarella]

Back in 1999 Apple invested $100 million in Samsung for similar reasons.

http://www.appleinsider.com/articles...e_designs.html

[Walter Slocombe]

anyone thinking OLEDs in Apple Products will appear in anything other than iPod/iPhones first are quite mistaken.

Still, dreaming of an Air with a 14" OLED whats not to drool over

[Johnny Mozzarella]

Originally Posted by iReality85

I wouldn't bet on it. Maintream OLED is still at least a couple years away. Sony's 11" OLED panel is still retailing for a cool $2,500, and LG's 15" is sure to garner more. Plus, Sony demo'ed a 27" OLED panel at CES (enormous for OLED at this point in time, but still quite small for panel sizes), and their response was basically no one could dream of affording this right now- it is only on display as a glimpse of things to come. Even at sizes like those of the iPhone, an OLED LCD screen would jack up the retail price tremendously...

The price of Sony's XEL-1 OLED TV has already dropped to $1,748.51.
Thats still crazy expensive for an 11" TV but it is dropping.

http://www.engadget.com/2008/08/05/s...lub-for-1-748/

[Lafe]

Originally Posted by iReality85

I wouldn't bet on it. Maintream OLED is still at least a couple years away. Sony's 11" OLED panel is still retailing for a cool $2,500, and LG's 15" is sure to garner more. Plus, Sony demo'ed a 27" OLED panel at CES (enormous for OLED at this point in time, but still quite small for panel sizes), and their response was basically no one could dream of affording this right now- it is only on display as a glimpse of things to come. Even at sizes like those of the iPhone, an OLED LCD screen would jack up the retail price tremendously...

I would bet on it. Apple is the company that put SSD in when people said
no one could dream of affording it and it was for the distant future. Now we see
SSD prices fallling. I'm not saying Apple gets all the credit for bringing us the
future faster, but I think they smell the future a bit better than other companies and
jump on it. That has to help.

OLED is a huge step forward. I for one will be happy to see it in Apple products
before the others come along and look like copy-cats. This is one reason Apple
keeps their product lines pricey -- it allows them to afford to include stuff that's
so new it's not anywhere else yet. When they do that, the new stuff gets spread
around pretty fast. We all benefit. Apple benefits too, because they had it first,
and showed the way.

My US$ 0.02.

[solipsism]

Of course OLED is coming to Apple products, but these posts make it sound like it's expected in the next revision.

I think we'll see it in a smaller device first, like a higher-end, higher-capacity iPhone, before we see it in any Mac product.

[CharlesS]

Originally Posted by lepton

Hey, guess what? LG is a big player in the emerging OLED market.

Check out the LG announcements, they are putting out a 15" OLED panel starting about now. Think about that in the lid of a MacBook Air, making it a quarter of an inch thinner, lower power, brighter even in sunlight, 180 degree viewing angle...

And with lifetime and the blue color problems just about solved for good, this is the time.

Here is what else will happen: OLED in the iPhone, iPod Touch, and NetPad! Maybe even this Summer. Thinner, lighter devices at lower power. What's a NetPad? My prediction for Apple's next new device, not a netbook, not exactly a tablet, flat with a 7.75" screen. I have a detailed article at myallo.com/blog

OLED is where Apple will go, as prices come down.

Hey, guess what else? LG/Philips is the major manufacturer of the high-end IPS panels that Apple's been using in their Cinema Displays and high-end iMacs since forever. Being low-volume components that are used by almost no one other than Apple anymore (the cheap 6-bit TN panels being much more popular, but completely unsuitable for the graphics pros Apple caters to), these panels have probably the highest likelihood of increasing in price of any component Apple uses, and securing themselves a decent price on these panels is obviously what this deal is about.

[hobBIT]

A lot of research has been done on OLED and its components over the last few years and many of the initial problems have been solved and are currently implemented for mass-production.

I think 2009 would have been the year of the 25-30" OLED displays, but they would be in the $5,000-$6,000 range. Which is a lot, but if you think about it also a lot cheaper than the initial plasma displays a few years back, which ran at $8,000-$10,000.
However, in today's economy not too many buyers would be found and hence these companies are a bit stuck with their large size OLED display introduction plan.

But smaller to medium sized OLED screens are definitely coming up fast.
Look at OQO. They just introduced an ultra portable with 5" OLED display and 800x480 resolution starting at $999. That resolution is almost 3x the iPhone's. Or in other words, I can definitely see an OLED display at the iPhone's 320x480 in a highend iPhone very soon.


So the price is not the real issue anymore, the capacity is. Currently no OLED manufacturer could build enough OLEDs to fill the volume iPhones are shipping in. They'd have to ramp up their production at least 3 to 5 fold.
Yet no one would do that kind of investment unless they have a guaranteed several year-long supply contract...

[Virgil-TB2]

Originally Posted by CharlesS

Hey, guess what else? LG/Philips is the major manufacturer of the high-end IPS panels that Apple's been using in their Cinema Displays and high-end iMacs since forever. Being low-volume components that are used by almost no one other than Apple anymore (the cheap 6-bit TN panels being much more popular, but completely unsuitable for the graphics pros Apple caters to), these panels have probably the highest likelihood of increasing in price of any component Apple uses, and securing themselves a decent price on these panels is obviously what this deal is about.

I think you pretty much hit the nail on the head here. This deal is more likely exactly what it says it is, a deal to secure panel production for the near future in times of economic uncertainty. It stabilises their supply line and costs them very little to nothing in return.

OLED is still crazy expensive, if it appears in any near term products it will be either a high-end luxury laptop like the Air, or a small device like the iPhone where the small screen size keeps the costs down and the power savings justify the decrease in the margins.

[Olternaut]

Any chance that deal is going to include LG's new flexible display technology for mobile devices?

[MacTel]

Originally Posted by Bergermeister

Now maybe I can expect a new 23" LCD Cinema Display.

I expect Apple to get into the television set business with built-in AppleTV and PVR.

[gugy]

It's about time to update that old line of ACD's.

[iCarbon]

I'm just wondering...

since LG is doing the netflix thing...

when is Apple going to buy netflix?

[hmurchison]

Originally Posted by iCarbon

I'm just wondering...

since LG is doing the netflix thing...

when is Apple going to buy netflix?

Never. It would be redundant. Apple doesn't need to mail
DVD nor do they need to stream (other than the streaming for a rental)

Quite honestly there's a possibility that Apple could be interested in making a
HDTV but odds are likely against it right now. I say this because networking
was a common theme amongst the CES '09 mid to high end displays. In fact
not only did we see networking but there is increased interest in upscaling tech.

I imagine that an Apple designed HDTV could have a nice screen with ATV UI and
even Dashboard widget support. Apple would also include upscaling technology which
would take SD and HD iTunes content and give them the edge they need to look great

I don't think we're going to see 1080p for a long time from Apple.

[iReality85]

Originally Posted by solipsism

Of course OLED is coming to Apple products, but these posts make it sound like it's expected in the next revision.

I think we'll see it in a smaller device first, like a higher-end, higher-capacity iPhone, before we see it in any Mac product.

Exactly, and that's what I was getting at. I would be highly surprised if it showed up in the iPhone's next revision. In 2 revisions, that's an entirely different story.

But lets consider what a 3.5" OLED iPhone screen might cost today. Right now the only available OLED screen of any good quality is on Sony's 11" OLED tv. Sony's listed MSRP is $2500. Let's also say that Sony has a 40% markup built into this price (which is reasonable to think).

$1800 cost base + $700 markup = $2500

Now lets say the actual screen portion of Sony's tv represents the major bulk of the cost (again, reasonable to think, because screens typically do represent the largest cost, especially something like OLED), and we arrive at $1200.

Take the 11" screen and divide it 3.5 ways. That comes to 3.14

$1200/3.14 = $382 for a 3.5" OLED screen, per Sony's cost. Now granted, LG will be supplying Apple with LCD screens, but the costs should be fairly similar, especially at this early stage of OLED development. Bulk purchases aside, as well as the difference between what a same size LED and OLED screen costs, the cost would be a lot for either AT&T or Apple (or both) to eat (on top of what they already eat) at this time in order to keep the iPhone at the same retail price.

I just don't think OLED is in the cards at the current time. But it will happen... eventually.

[Macs_since_1984]

Originally Posted by gastroboy

Going by the quality of their flat panel TVs, I think Samsung has the edge in quality over LG.

So I bought a Sony :-) which was stand out tops.

Does anyone know of a website where monitors are tested?

I'm not sure about monitor testing but I'm in the electronics manufacturing business. I can assure you that Samsung makes Sony's displays on the same production lines.

It is a touchy situation that Samsung and Sony only discess off the reord.

[theskeptic]

In the post easy credit era Apple's $25 billion cash hoard is going to be a huge competitive advantage. In this deal they simply take 2% of their cash and make a prepayment that will presumably give them first dibs and best pricing on all the cool stuff from LG coming down the pike. That's a strategic use of their reserves and I'd give anything to know how else they plan to use it. I don't think there is any company out there that is looking as many moves ahead as Apple.

[Fast Fred 1]

There going to Apple brand the LG Wrist Phone. Wow. The Apple IDick phone, for Dick Tracy of course, for those old enough to understand and wanted one since we were kids. Yowsa.... how neat was the wrist radios!

[hobBIT]

Originally Posted by iReality85

$1200/3.14 = $382 for a 3.5" OLED screen, per Sony's cost.

That's likely no longer true.

If an 800x480 OLED OQO + 1.86GHz Atom CPU + 2GB RAM + 120GB HD + WiFi + BluTooth + touch screen + HDMI out + magnesium alloy case + LiIon battery + Windows Vista Business license = $1499 then surely a 320x480 OLED on its own would cost no more than $200 in volume production. (Assuming that OQO actually makes a profit on those $1499 UMPCs.)

It is certainly feasible that if Apple spreads out the iPhone into 3 models, small (nano?), medium (= current), large (= new top model), that said top model could use an OLED display in the next revision.


The problem I see is not prices but volume production.

[Alonso Perez]

Originally Posted by iReality85

$1800 cost base + $700 markup = $2500

Now lets say the actual screen portion of Sony's tv represents the major bulk of the cost (again, reasonable to think, because screens typically do represent the largest cost, especially something like OLED), and we arrive at $1200.

Take the 11" screen and divide it 3.5 ways. That comes to 3.14

$1200/3.14 = $382 for a 3.5" OLED screen, per Sony's cost. Now granted, LG will be supplying Apple with LCD screens, but the costs should be fairly similar, especially at this early stage of OLED development. Bulk purchases aside, as well as the difference between what a same size LED and OLED screen costs, the cost would be a lot for either AT&T or Apple (or both) to eat (on top of what they already eat) at this time in order to keep the iPhone at the same retail price.

Um, no.

You combined Sony's gross profit plus retail markup, plus shipping to the store as a finished product, etc. The manufacturing cost of the unit is almost never more than half of MSRP. So at most $1200. The display itself would then be around $900.

But your division is the real problem. We are talking about area, not a linear dimension. An 11" diagonal screen has room for 9 (NINE), not three 3.5" screens. $900 / 9 = $100.

So a 3.5" OLED screen costs between $50 and $150. IIRC, the current iPhone display is around $25. It's a bit more expensive, but the advantages are so many that I would not be surprised if very soon (six months) a high-end iteration of the iPhone would indeed have an OLED screen. If so, then IMHO this is the real point of the deal, since for conventional LCD screens it will be a buyer's market for the foreseeable future.

[hobBIT]

Originally Posted by Alonso Perez

An 11" diagonal screen has room for 9 (NINE), not three 3.5" screens. $900 / 9 = $100.

Um, probably no.

The XEL-1 has a native resolution of 960x540, that's 518,400 pixel.
The iPhone's 320x480 screen has 153,600 pixel.
So from one XEL-1 OLED panel you can cut about 3.375 iPhone panels. (Although technically it's not the same process as cutting LCD panels.)

The math would be $900 / 3.375 = $267.

But again, the XEL-1 was introduced in 2007 in Japan, and surely OLED manufacturing and pricing changed since. Hence my guess would be $200 in today's OLED technology would seem reasonable. And at the iPhone's volume it should be lots cheaper still.

[Alonso Perez]

Originally Posted by Walter Slocombe

anyone thinking OLEDs in Apple Products will appear in anything other than iPod/iPhones first are quite mistaken.

Still, dreaming of an Air with a 14" OLED whats not to drool over

I expect OLED in Apple phones or pad-like devices this year, but I'm not holding my breath for an OLED notebook just yet. At least not as a base configuration. But I wouldn't be completly surprised if they do like with the SSD, and offer OLED as a high-priced luxury option for the kind of people who can afford it and must have the latest thing.

I can see it now, a polished gray anodized titanium Air with a 14" OLED screen, SSD, and 4GB, modestly priced at $3999. A $999 option could be a ballistic kevlar insert to fill the space where the LCD screen used to be. Handy for the stylish war correspondent or design-conscious contractor working in Iraq.

[Macfabulous]

Originally Posted by iReality85

I wouldn't bet on it. Maintream OLED is still at least a couple years away. Sony's 11" OLED panel is still retailing for a cool $2,500, and LG's 15" is sure to garner more. Plus, Sony demo'ed a 27" OLED panel at CES (enormous for OLED at this point in time, but still quite small for panel sizes), and their response was basically no one could dream of affording this right now- it is only on display as a glimpse of things to come. Even at sizes like those of the iPhone, an OLED LCD screen would jack up the retail price tremendously...

Remember back when Apple made a statement about an upcoming "product transition", that would affect future profit margins and cause Apple earnings to come in lower than expected. I think it was back in July.

Everyone assumed that the "Unibody Structure" for the new MacBooks where that "product transition". Apple actually never told anybody that this actually was THE "product transition" REFERED to. They told anyone how proud they where of this new technology, but nothing about further costs regarding the new process. That was only assumed, by "us" and the media. Am I not correct?

If so... Couldn´t it be something else entirely? As for example, getting the "edge" over the competition, by introducing these "OLED panels"?

Just a thought...

[Alonso Perez]

Originally Posted by hobBIT

Um, probably no.

The math would be $900 / 3.375 = $267.

You are counting pixels, but area is more important than pixels, since the pixels are not individually manufactured. The same amount of substrate as for an 11" screen yields more than nine screens. Also, the smaller screens will have a better manufacturing yield.

[hobBIT]

Originally Posted by Alonso Perez

You are counting pixels, but area is more important than pixels

How so?
The expensive part of OLEDs is not the active matrix technology but the organic compounds making up the pixels. As well as the tech to ensure these are air tight. So IMHO each pixel counts and the number of pixels would drive the OLED price. But of course number of pixels and area size might not correlate.

The amount of chemical compounds used depends on pixel spacing as well as pixel size. Neither of which we really know for the XEL-1 and current iPhone display. Could very well be that the iPhone requires denser pixels with less spacing, i.e. more chemical compounds than a similar surface area on the XEL-1.

But if it all points to being cheaper than more expensive - then the better!
Would be nice to see a MacBook Air 2 with super thin screen - and longer battery life.

[Ireland]

Originally Posted by lepton

Hey, guess what? LG is a big player in the emerging OLED market.

Check out the LG announcements, they are putting out a 15" OLED panel starting about now. Think about that in the lid of a MacBook Air, making it a quarter of an inch thinner...

You're living in dreamland if you think adding an OLED display to the MacBook Air would make it 1/4" thinner. Dreamland. The glass and the aluminum take up the majority of the current display thickness, that wouldn't change no matter the technology in between. Thinner yes, maybe, but not thinner like you imagine. More like "a hair thinner". At the end of the day thickness isn't the issue with these notebooks, or the iPhone. It's contrast. The contrast on the iPhone's display is positively the worst thing about the phone (I have been beating this drum for nearly a year now), its display is big for a phone, an OLED display will make the display the phone best feature, currently it's the phones weakest link.

[Alonso Perez]

Originally Posted by hobBIT

How so?

But I guess the actual surface area, i.e. amount of chemical compounds used, depends on pixel spacing and pixel size. Neither of which we really know. Could very well be that the iPhone requires denser pixels with less spacing.

If pixels were the cost driver, then large OLED screens would not be prohibitive. But they are.

[Ireland]

Originally Posted by Walter Slocombe

anyone thinking OLEDs in Apple Products will appear in anything other than iPod/iPhones first are quite mistaken.

Still, dreaming of an Air with a 14" OLED whats not to drool over

Considering the Air has a 13" display, you must be dreaming.