The story of Apple and OLED screen may continue with a new source except for Samsung. According to the Nikkei Asian Review, Apple is close to signing an agreement with Chinese company BOE for OLED panels for its iPhones.
The Nikkei, citing sources, continued that Apple was “aggressively testing” BOE’s flexible organic light-emitting diode (OLED) displays, adding the company would decide by the end of the year whether to take the company on as a supplier of the panels or not.
Apple’s (AAPL) iPhone has seen its average selling price shoot up considerably since it released the iPhone X two years ago. One reason is that the tech giant has passed on the higher costs of the OLED screens on the X models to its customers.
Apple’s (AAPL) iPhone has seen its average selling price shoot up considerably since it launched the iPhone X two years ago. One reason is that the tech giant has passed on the higher costs of the OLED screens on the X models to its customers.
Currently, Samsung (SSNLF) is the only provider that makes high-quality OLED screens for smartphones. Thereupon, the South Korean electronics giant charges Apple about $100 per screen, according to some news.
Apple has decided to source its OLED screens from other vendors. Although the company reached out to LG last year to source OLED screens, LG only makes OLED screens for TVs and hasn’t completed making a strong OLED panel for smartphones yet. As a result, Apple has continued with the more expensive Samsung OLED panels.
The U.S. tech giant is anticipated to uncover its new flagship phones in September, and speculation has grown over what Apple will bring to the table with the newest models. Last year, the company brought out three new models, the XS, XS Max, and XR.
Analysts don’t expect about new iPhone, which has been named the iPhone 11 by industry watchers, to include notable updates to earlier models. The expectation is that the company will not publish phones with any major developments, including 5G, until 2020.
Choosing a Chinese company would be a shocking move, given the company has warned of the impact of the U.S.-China trade war on its business. Many of Apple’s major products, including the iPhone, are produced in China and And this is a prime example of the tariffs’ cost for US consumers.
The firm has reportedly considered moving some products out of the country but got a small reprieve earlier this month after the U.S. stated it would delay tariffs on electronics and other consumer goods made in China until 15 December.
Samsung has enjoyed significant technological leadership in advanced flexible OLED panels and was the single company capable to meet Apple’s demands for the iPhone X/XS in terms of both quality and volume production. Neither US nor Japanese companies have so far been able to meet Apple’s exacting needs.
This left Apple forced to place all its orders with the company, a situation the iPhone producer usually tries to avoid for reasons of both risk and negotiating power. Certainly, the power balance was tipped so strongly in Samsung’s favor that Apple reportedly ended up owing Samsung more than $170 million in penalties for failing to hit promised order levels.
However, the situation surrounding OLED panels might be changing. According to the Nikkei Asian Review, Apple is close to inking a deal with Chinese company BOE for OLED panels for its iPhones.
According to the report, “Apple is in the final stages of certifying advanced screens from top Chinese display maker BOE Technology Group for iPhones next year.” However, the iPhone maker seems to be moving cautiously. The report continued, “Apple will decide by the end of this year whether to take on BOE as a supplier of its single most expensive component.”
OLED panels are considered superior to LED screens because of the former’s capability to represent colors better. In addition to being less battery-intensive than LED screens, OLED screens are also lighter and more flexible.
Sources say that Apple is currently testing OLED displays at BOE’s facility in Chengdu. BOE is said to be building a second facility in the area as well, and if Apple does place orders with BOE, the new facility would be only allocated to supplying Apple with the parts it wants.
In 2017, an IHS Markit teardown claimed that the OLED display accounted for $110 of the $370.25 cost to build an iPhone X. It is far and away from the most expensive element, but a source tells Nikkei that BOE’s display maybe 20% cheaper than the display Samsung products. So even if the iPhone 12 doesn’t feature as drastic of a redesign as the Galaxy S10 or a standout new feature, Apple and a new OLED screen may be a major defeat for Samsung next year.