Apple's plans for an OLED iPhone might hinge on small Japanese firm

Posted:
in iPhone edited December 2016
Apple is rumored to introduce its first OLED iPhone model in 2017, but the company's ability to produce next-generation displays at scale could hinge on the availability of machines made by a single Japanese firm.


Canon Tokki's ELVESS OLED manufacturing system.


Detailed in a report from Bloomberg on Wednesday, Apple's search for the best OLED panels on the market ends at Canon Tokki, a small branch of Japanese imaging giant Canon ("tokki," roughly translated, means "special equipment").

With only 343 employees, Canon Tokki spent the last 20 years perfecting the machines suppliers like Samsung, LG and Sharp use to manufacture OLED screens. According to the report, almost all OLED panels in production are built using the firm's equipment.

However, even after doubling output in 2016, Canon Tokki builds less than 10 units per year, the report said. Due to the slow turnaround time, the outfit has a backlog of orders stretching out to about two years.

Canon Tokki's latest OLED solution, the $85 million ELVESS OLED, is a self-contained, 100-meter long vacuum production line that deposits red, green and blue pixels on a glass surface through a vapor deposition process.

Unique to Canon Tokki's process, and the reason why ELVESS is in such high demand, is a patented camera tracking mechanism that allows the machine to lay down pixels with an extremely narrow margin of error. This capability helps minimize defects, thereby improving raw yield.

With a near monopoly on a machine vital to the OLED production process, Canon Tokki is central to Apple's rumored plans to integrate the screen technology in a next-generation iPhone. Of note, after Foxconn purchased display maker Sharp in March, chairman Terry Gou told employees he personally visited Canon Tokki's headquarters in Niigata to secure an order. Whether or not that trip was successful is unclear.

As it stands, OLED suppliers are hard-pressed to meet existing orders for smartphones that incorporate the technology, like Samsung's Galaxy line and more recently Google's Pixel. Considering Apple's normal shipping volumes, an iPhone featuring OLED technology is likely to increase panel demand by a large magnitude.

Apple is widely rumored to launch at least one OLED-toting iPhone model for the device's 10th anniversary next year, with recent reports claiming the high-end unit will incorporate curved panels from Samsung. The company is expected to at the same time debut two "s" cycle upgrades, likely "iPhone 7s" and "iPhone 7s Plus," but reports conflict as to whether those models will also get the OLED treatment.
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Comments

  • Reply 1 of 16
    mj webmj web Posts: 918member
    Well, Tim Cook could always reintroduce a fourth iteration of the iPhone 6 design, Jonny Ive can remain on permanent design sabbatical doing occasion voiceovers, and Phill Shiller can produce another round of saccharine ad campaigns. While Cook concentrates on moving his stodgy company to the hot new spaceship campus. BTW, I heard Tim Cook was such a great supply chain guy? He appears to be as inept at supply chain management as he is at being a CEO.
    edited December 2016 repressthisMacsplosionVernonDozier
  • Reply 2 of 16
    paxmanpaxman Posts: 4,603member
    mj web said:
    Well, Tim Cook could always reintroduce a fourth iteration of the iPhone 6 design, Jonny Ive can remain on permanent design sabbatical doing occasion voiceovers, and Phill Shiller can produce another round of saccharine ad campaigns. While Cook concentrates on moving his stodgy company to the hot new spaceship campus. BTW, I heard Tim Cook was such a great supply chain guy? He appears to be as inept at supply chain management as he is at being a CEO.
    Geez! AND its raining outside. What a horrible world!
    Macsplosiontycho24VernonDozierrevenantjay-tai46StrangeDaysjony0
  • Reply 3 of 16
    The ONLY thing holding back significant OLED production is cash, and Apple has plenty of that. If Apple think's OLED is required it will contract for the production machines instead of waiting for OLED manufacturers to grow their capacity organically. Since the iPod's 2.5" HD Apple has done this several times. There is no worthwhile story here.
    VernonDozierai46
  • Reply 4 of 16
    mj web said:
    Well, Tim Cook could always reintroduce a fourth iteration of the iPhone 6 design, Jonny Ive can remain on permanent design sabbatical doing occasion voiceovers, and Phill Shiller can produce another round of saccharine ad campaigns. While Cook concentrates on moving his stodgy company to the hot new spaceship campus. BTW, I heard Tim Cook was such a great supply chain guy? He appears to be as inept at supply chain management as he is at being a CEO.
    Sog, is that you? Incredibly narrow minded and uninformed. Major eye roll.
    revenantjay-tai46jony0
  • Reply 5 of 16
    The article was informative and interesting. Thanks (I directly go to the forum, so I don't see who has written the article).
  • Reply 6 of 16
    The ONLY thing holding back significant OLED production is cash, and Apple has plenty of that. If Apple think's OLED is required it will contract for the production machines instead of waiting for OLED manufacturers to grow their capacity organically. Since the iPod's 2.5" HD Apple has done this several times. There is no worthwhile story here.
    Well, leaks can be actually a form of "disclosure" to investors. When facts like these are disclosed, Wallstreet Analysts can re-tune their financial models including expected earnings for the company. Also, a company like Canon Tokki may receive all the financial support needed to fill an order for Apple. Another reason to disclose news like this would be to disclose this as a type of un-expected capital expense; either way, some people call them rumors, but often times, there are facts within the rumors which need to be disclosed.
    ai46
  • Reply 7 of 16
    This highlights an interesting phenomenon – Apple's technology is hamstrung by the necessity of producing in the 10s of millions. While other manufacturers do not have this problem and could implement lower-yield, cutting edge technology... yet they don't. When it comes to smartphones, we really don't see any genuinely original or innovative technological firsts from anything but the iPhone.
    edited December 2016 ai46jony0
  • Reply 8 of 16
    This highlights an interesting phenomenon – Apple's technology is hamstrung by the necessity of producing in the 10s of millions. While other manufacturers do not have this problem and could implement lower-yield, cutting edge technology... yet they don't. When it comes to smartphones, we really don't see any genuinely original or innovative technological firsts from anything but the iPhone.
    Well... I think Samsung sells quite a few phones, and they've managed to go OLED way ahead of Apple. 

    Gruber makes an interesting point, which is that color accuracy with OLED kind of sucks. That could be a legit reason for Apple sticking with LCD. 
  • Reply 9 of 16
    blastdoor said:
    This highlights an interesting phenomenon – Apple's technology is hamstrung by the necessity of producing in the 10s of millions. While other manufacturers do not have this problem and could implement lower-yield, cutting edge technology... yet they don't. When it comes to smartphones, we really don't see any genuinely original or innovative technological firsts from anything but the iPhone.
    Well... I think Samsung sells quite a few phones, and they've managed to go OLED way ahead of Apple. 

    Gruber makes an interesting point, which is that color accuracy with OLED kind of sucks. That could be a legit reason for Apple sticking with LCD. 
    This I think is the key point. Due to lack of manufacturing capacity/capability, Apple has pushed forward with improving (significantly) LCD technology to the point that it's BETTER than OLED in many ways. OLED really isn't as great as many would have you think. If you look at the actual data it's not as energy efficient as they'd have you believe. And based on the improvements that Apple has made to LCD tech I'd say it's quite possible that Apple doesn't make the shift to OLED. 

    OLED feels like just another spec race that Apple hasn't played to date. And I think that's okay. The screen on my 7 Plus is fantastic and my battery life rocks. Why do I need OLED?
    ai46StrangeDaysjony0
  • Reply 10 of 16
    gatorguygatorguy Posts: 20,748member
    This highlights an interesting phenomenon – Apple's technology is hamstrung by the necessity of producing in the 10s of millions. While other manufacturers do not have this problem and could implement lower-yield, cutting edge technology... yet they don't. When it comes to smartphones, we really don't see any genuinely original or innovative technological firsts from anything but the iPhone.
    There's lots of "innovative firsts" from other smartphone manufacturers. Many of them are such small/new companies with little in the way of media influence that you don't read about them on typical blog sites like this one. Obviously when "Apple gets it right" you DO read about it. Everywhere. On every site and many big media outlets. So yeah, some innovative feature or function someone else initially developed sounds as tho it's brand new and unique when a big company like Apple uses it. 

    As is frequently said, Apple is very often not the company that originally comes up with an innovative and creative implementation but more often than not is the one that gets it right when they decide to use it. 
    edited December 2016 jony0
  • Reply 11 of 16
    blastdoorblastdoor Posts: 1,929member
    crudman said:
    blastdoor said:
    This highlights an interesting phenomenon – Apple's technology is hamstrung by the necessity of producing in the 10s of millions. While other manufacturers do not have this problem and could implement lower-yield, cutting edge technology... yet they don't. When it comes to smartphones, we really don't see any genuinely original or innovative technological firsts from anything but the iPhone.
    Well... I think Samsung sells quite a few phones, and they've managed to go OLED way ahead of Apple. 

    Gruber makes an interesting point, which is that color accuracy with OLED kind of sucks. That could be a legit reason for Apple sticking with LCD. 
    This I think is the key point. Due to lack of manufacturing capacity/capability, Apple has pushed forward with improving (significantly) LCD technology to the point that it's BETTER than OLED in many ways. OLED really isn't as great as many would have you think. If you look at the actual data it's not as energy efficient as they'd have you believe. And based on the improvements that Apple has made to LCD tech I'd say it's quite possible that Apple doesn't make the shift to OLED. 

    OLED feels like just another spec race that Apple hasn't played to date. And I think that's okay. The screen on my 7 Plus is fantastic and my battery life rocks. Why do I need OLED?
    Yeah, I have similar thoughts. 

    I can appreciate the aesthetic appeal (or at least novelty) of an edge-to-edge display. Can that be done with LCD? 

    The whole flexible display thing, though, strikes me as a gimmick. 

    I generally think Apple makes good choices regarding the iPhone. Their significant investment in custom SOC development has given them a really amazing lead in performance. I'll take great performance over Samsung's Edge gimmick any day. 
  • Reply 12 of 16
    The ONLY thing holding back significant OLED production is cash, and Apple has plenty of that. If Apple think's OLED is required it will contract for the production machines instead of waiting for OLED manufacturers to grow their capacity organically. Since the iPod's 2.5" HD Apple has done this several times. There is no worthwhile story here.
    Not always, Apple threw money at Sapphire glass via GT Advanced, the technology/manufacturing yield simply couldn't cope with the scale required and it all went t*ts up.
  • Reply 13 of 16
    crudman said:
    blastdoor said:
    This highlights an interesting phenomenon – Apple's technology is hamstrung by the necessity of producing in the 10s of millions. While other manufacturers do not have this problem and could implement lower-yield, cutting edge technology... yet they don't. When it comes to smartphones, we really don't see any genuinely original or innovative technological firsts from anything but the iPhone.
    Well... I think Samsung sells quite a few phones, and they've managed to go OLED way ahead of Apple. 

    Gruber makes an interesting point, which is that color accuracy with OLED kind of sucks. That could be a legit reason for Apple sticking with LCD. 
    This I think is the key point. Due to lack of manufacturing capacity/capability, Apple has pushed forward with improving (significantly) LCD technology to the point that it's BETTER than OLED in many ways. OLED really isn't as great as many would have you think. If you look at the actual data it's not as energy efficient as they'd have you believe. And based on the improvements that Apple has made to LCD tech I'd say it's quite possible that Apple doesn't make the shift to OLED. 

    OLED feels like just another spec race that Apple hasn't played to date. And I think that's okay. The screen on my 7 Plus is fantastic and my battery life rocks. Why do I need OLED?
    It really depends on your view of the future of foldable smartphones (or devices).  OLED allows this to happen

    http://www.patentlyapple.com/patently-apple/2016/12/a-leading-supplier-of-foldable-display-technology-confirms-five-tech-companies-are-testing-foldable-smartphones.html
  • Reply 14 of 16
    I am a bit disappointed at the quality of research in this article. 

    Canon Tokki is not the only manufacturer of high quality OLED production tools. 

    LG panels will be manufactured using Sunic systems equipment. 

    http://www.oled-a.org/news_details.cfm?ID=1239

    With LG going to another supplier, it is conceivable that Canon Tokki might be able to deliver the manufacturing equipment to another company such as Sharp or JDI. However, LG has very aggressive plans in the OLED space. 

    With the expertise already possessed by LG in the space, the question becomes one of why Apple wouldn't just contract out with LG to build the panels as opposed to trying to acquire equipment from Canon Tokki and potentially experiencing another debacle on the order of GT-AT with the sapphire glass. After all, LG is already building ultrafine displays which Apple sells. The company also manufactures the p-OLED panels used in the Apple watch. 

    If LG is successful using Sunic systems equipment, they will building large quantities of high quality OLED panels for lower cost than ones built by another manufacturer using Canon Tokki equipment. 

    The interesting thing that the link touched on was the fact that LG's Gen 6 E5 fab is producing flexible OLED panels which tend to go into smaller devices. The E5 fab won't be using manufacturing equipment built by Canon Tokki. 

    If Apple goes the route of Canon Tokki, it's a huge risk. They might get stuck paying much higher costs for OLED panels than other companies who source OLED panels from LG. 

    The details are incredible. 45,000 55 inch panels at 100% yield per month. 
  • Reply 15 of 16
    mj web said:
    Well, Tim Cook could always reintroduce a fourth iteration of the iPhone 6 design, Jonny Ive can remain on permanent design sabbatical doing occasion voiceovers, and Phill Shiller can produce another round of saccharine ad campaigns. While Cook concentrates on moving his stodgy company to the hot new spaceship campus. BTW, I heard Tim Cook was such a great supply chain guy? He appears to be as inept at supply chain management as he is at being a CEO.
    What are on earth are you talking about? Apple is earning more and is more valuable than ever, all while maintaining the highest consumer satisfaction ratings in the business. 

    Further if you're referring to AirPod delays, those were clearly something outside his personal purview. But once they got stock they moved them immediately -- mine, originally 4 weeks delayed, get here Tuesday. 
  • Reply 16 of 16

    The article was informative and interesting. Thanks (I directly go to the forum, so I don't see who has written the article).
    Me too. It's odd that they don't include the byline. 
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