Samsung's OLED iPhone display supply dominance challenged
Apple's investment and patience may be rewarded soon, as a long-time rumored second supplier of OLED screens appears to be finally ramping up production, perhaps in time for the fall iPhone lineup.
Citing sources familiar with the matter, a report on Thursday morning claims that LG Display will be delivering between 2 million and 4 million OLED panels to Apple for use in a future iPhone. If accurate, this would start to put a dent in Samsung's supply dominance of the panel for Apple, giving the iPhone producer an option for the future -- assuming LG can ramp up supply sufficiently.
"Securing a second supplier for OLED screens is crucial for Apple as it will allow the company to reduce its reliance on Samsung, which is currently the sole supplier," said Jerry Kang, a senior principal analyst at IHS Markit told the South China Morning Post. "At the same time, it will help accelerate a broad adoption of OLED screens. More suppliers means more volume, and in turn, lower pricing."
If the numbers are correct, and the delivered panels are intended for this year, only a handful of 2018 iPhones will have an LG-supplied screen. The panels may be held back for a future device, when enough of them are accumulated.
In January, LG was expected to ship between 15 to 16 million OLED panels in the second half of 2018. That contrasts sharply with iPhone X panel supplier Samsung Display, which is thought to be churning out nearly 10 million units per month.
"Regarding the OLED supply deal for Apple's iPhone X, nothing has been set in detail," LG wrote in a regulatory filing in December 2017. "When anything is confirmed in detail, we will announce it, or [otherwise an announcement will be made] in a month."
Earlier in July 2017, it was rumored that Apple pumped $2.7 billion into LG as an advance payment for OLED panels. At the time it was thought that the order was for panels shipping in calendar year 2019, but it could be that the terms -- and LG's ability to deliver -- have evolved.
At present, Samsung is the exclusive supplier of OLED panels for the iPhone X, being the only firm with enough production capacity to meet Apple demands. Samsung has been using OLED panels it makes on its phones for years, including curved ones on devices like the Galaxy S8.
The three iPhone models currently speculated to arrive this fall include two models with OLED screens measuring 6.5 inches and 5.8 inches, while a third is equipped with a 6.1-inch TFT LCD. Most sources now claim that all three will have the TrueDepth camera array and use Face ID, but the LCD model will be singled out as a cost-effective model while the OLED versions will have more premium pricing and specifications.
Two report sources claim that, in order to avoid any manufacturing delays that allegedly occurred during the initial production of the iPhone X, suppliers were informed by Apple to prepare for the two OLED models earlier than "normal" in 2018. Increased preparation ahead of production could fend off component shortages and quality control issues that were said to have caused last year's manufacturing problems.
Foxconn will continue to be the main iPhone assembler this year, with it said to handle all 5.8-inch OLED units and 80 to 90 percent of the 6.5-inch OLED version, as well as 30 percent of LCD model orders. Pegatron is identified as taking 60 percent of the LCD orders and between 10 and 15 percent of the 6.5-inch OLED model orders, while Wistron makes up the remainder.
The LCD model is expected to cost between $600 and $700, with the so-called "iPhone X Plus" again hitting $1000 and up.
Citing sources familiar with the matter, a report on Thursday morning claims that LG Display will be delivering between 2 million and 4 million OLED panels to Apple for use in a future iPhone. If accurate, this would start to put a dent in Samsung's supply dominance of the panel for Apple, giving the iPhone producer an option for the future -- assuming LG can ramp up supply sufficiently.
"Securing a second supplier for OLED screens is crucial for Apple as it will allow the company to reduce its reliance on Samsung, which is currently the sole supplier," said Jerry Kang, a senior principal analyst at IHS Markit told the South China Morning Post. "At the same time, it will help accelerate a broad adoption of OLED screens. More suppliers means more volume, and in turn, lower pricing."
If the numbers are correct, and the delivered panels are intended for this year, only a handful of 2018 iPhones will have an LG-supplied screen. The panels may be held back for a future device, when enough of them are accumulated.
In January, LG was expected to ship between 15 to 16 million OLED panels in the second half of 2018. That contrasts sharply with iPhone X panel supplier Samsung Display, which is thought to be churning out nearly 10 million units per month.
"Regarding the OLED supply deal for Apple's iPhone X, nothing has been set in detail," LG wrote in a regulatory filing in December 2017. "When anything is confirmed in detail, we will announce it, or [otherwise an announcement will be made] in a month."
Earlier in July 2017, it was rumored that Apple pumped $2.7 billion into LG as an advance payment for OLED panels. At the time it was thought that the order was for panels shipping in calendar year 2019, but it could be that the terms -- and LG's ability to deliver -- have evolved.
At present, Samsung is the exclusive supplier of OLED panels for the iPhone X, being the only firm with enough production capacity to meet Apple demands. Samsung has been using OLED panels it makes on its phones for years, including curved ones on devices like the Galaxy S8.
The three iPhone models currently speculated to arrive this fall include two models with OLED screens measuring 6.5 inches and 5.8 inches, while a third is equipped with a 6.1-inch TFT LCD. Most sources now claim that all three will have the TrueDepth camera array and use Face ID, but the LCD model will be singled out as a cost-effective model while the OLED versions will have more premium pricing and specifications.
Two report sources claim that, in order to avoid any manufacturing delays that allegedly occurred during the initial production of the iPhone X, suppliers were informed by Apple to prepare for the two OLED models earlier than "normal" in 2018. Increased preparation ahead of production could fend off component shortages and quality control issues that were said to have caused last year's manufacturing problems.
Foxconn will continue to be the main iPhone assembler this year, with it said to handle all 5.8-inch OLED units and 80 to 90 percent of the 6.5-inch OLED version, as well as 30 percent of LCD model orders. Pegatron is identified as taking 60 percent of the LCD orders and between 10 and 15 percent of the 6.5-inch OLED model orders, while Wistron makes up the remainder.
The LCD model is expected to cost between $600 and $700, with the so-called "iPhone X Plus" again hitting $1000 and up.
Comments
i would rather Samsung continue overcharging Apple for OLEDs that use Apple’s technology, as the current display is, than Apple having more controversy as to which phone you get, because of the display used. This wouldn’t be the first time that Apple used more than one display vendor where one display was better than the other. Apple really doesn’t need that nonsense right now.
Personally I think the LCD panels discussed above are not for an iPhone X style device, but rather the iPhone 9, which will be similar in design to the iPhone 8, that will still have top and bottom bezels, but will be made much thinner by removing Touch ID from the bottom bezel and incorporating the TrueDepth camera in the top bezel. And that the "iPhone 9" will actually come in three sizes; mini, normal, and Plus. The iPhone X will remain the same (with the addition of a Plus size), but of course internal components will be upgraded, including a new TrueDepth 2 sensor array.
The iPhone 8, 7 and SE will be retired and the 6s and 6s Plus will remain as the "affordable" model (and maybe even rebranded as the new SE, with a slight SoC upgrade to the A10).
First of all, LG is not GT Advanced Technologies. GTAT was trying to do something they had never done before, at a scale they had never done before. No one knew if it would actually work or not, but Apple was betting on it and lost. GTAT turned out to have an incompetent management team that was not at all experienced or ready for what was expected of them. Second, LG is a huge conglomerate with a lot of experience at mass producing displays. I think they would know what they can and cannot do, and won't just "hope for the best" when doing business with a company like Apple. Especially when it comes to possibly taking business away from one of their main competitors. And finally, I don't think this has ever been about display quality, it's about what a company can produce at scale and LG simply has not been able to produce those Apple displays in any meaningful numbers at least not in a cost effective way. Enter Apple and their cash pile.
Now, I'm not saying it is in fact a sure thing that LG will be able to accomplish this, but I am saying the chances of them failing are minute.
2) I forget which display companies Apple has invested in the past, but I do know this isn't the first time that they've done something like this. I think the first I heard of this was about 18 months before the first high-resolution IPS displays came to Apple devices (aka Retina). The sapphire deal was a dud, but that seems like the exception rather than the rule.
2) Saying that Samsung is overcharging is like when people come here saying that Apple is overcharging for their iPhone and then using some superficial specs to make the claim. At least with the iPhone the demand is outstripping their ability to produce for many months after a launch so it's arguable that Apple is not only NOT overcharging, but is undercharging as it's below the equilibrium price for several months.
2) No idea on the extent of Apple's LM investments and goals but I do see that they have a lot of patents as of this year. Now they could've already dropped it by the time these patents posted. They may also using it without informing the consumer, but to me is seems like something they'd want to market.
seriously, LG is in the same boat GT was. GT was the worlds largest producer of both sapphire boules, and the largest producer of sapphire furnaces. They were supplying Apple with sapphire Windows for their cameras, and covers for Apple’s Touch ID button. They had a very good reputation. Apple wanted a much higher quantity of sapphire for their screens. GT designed larger furnaces for that purpose. It didn’t work out.
LG is a company that is the worlds largest supplier of OLED screens for TVs. They supply small numbers of OLED screens for phones. Their phone screens are of very poor quality, which is something you can verify in the reviews of the Google phones that use them, and in the reviews of LGs’ own phones that use them. Even if they managed to get the supply of those screens to Apple’s needs, they would still be of very poor quality. I don’t think that anyone here who is familiar with the reports of the products using those screens, would want Apple to use them. They are substandard, and both the OLED screens that Samsung produces for themselves, or the Apple designed screens they produce for Apple, are of far better quality in about every way.
i find it hard to believe that suddenly, LG has been able to totally redo those screens so as to meet Apple’s far higher standards. This is going to be a process, and whenLG is able to meet those standards isn’t known by us, and possibly isn’t known yet by Apple or LG.
meanwhile, LG is in the wings. But LG can’t yet produce in the numbers needed, AND, in looking at their current OLED phone screens, can’t produce a quality product. Why Google went with it in their Pixel 3 XL is hard to say, but it’s terrible. The same thing is true for LG’s own top line phone. The screen, no doubt the same as the one form Google, is also terrible.
so LG has two hurdles to leap. Make a new screen with Apple’s technology, make it in sufficient numbers, and, oh yes, get the quality up to the level as the Samsung screens.
and by the way, the current Samsung phone screen was rated by Display Technology as slightly BETTER than Apple’s iPhone X screen. Heh! That’s why competition is good. Hopefully this year’s Apple screens will be slightly better still, and so it goes.
Cook has shown himself to be excellent in this position and for you to discount Cook and Apple with these hyperbolical claims is an insult to everything they've accomplished. I figure you think you're supporting Apple with this implication that Sammy is bending Apple over and fucking them in the ass, but you're not. Whether you like it or not Samsung is Apple's business partner. Apple isn't a victim so enough with the finger-pointing and scapegoating.
It will be no different if and when LG produces OLEDs for Apple.
As to Apple's investment in LG, LG didn't have the resources to expand OLED production capacity to meet Apple's needs. Apple and LG negotiated an OLED display prepayment that permitted LG to expand OLED production, this after LG demonstrated that it could meet Apple's quality specifications.
The issue now is whether LG has completed enough expansion to become a supplier. I personally didn't/don't think LG will become a supplier until the 2020 model year. There just wasn't enough time, when the deal was negotiated, to get through the permitting process, construct the expansion (new factory) and commence production in time for the 2019 model. In a Bloomberg report filed today, LG is still waiting for government approval (expected to be granted) to construct a display factory in Guangzhou. If that factory is designated to produce OLED displays there isn't anywhere near enough time to start/complete construction AND supply Apple by July 2018 when 2019 models begin to ramp.