According to the latest reports, Apple's plan to become the second supplier of iPhone OLED screens with LG seems to only be delayed, and Samsung will remain the sole supplier of Apple's OLED mobile phone screens.
In January this year, there was news that Apple and LG Display had already started negotiations to provide OLED panels for the new iPhone, especially for the so-called “iPhone X Plus” model, which is attracting attention from the new iPhone camp this year. A big screen machine because it is the iPhone with the largest screen ever. The purpose of Apple's quest for LG negotiations is obvious, in order to diversify screen suppliers and reduce dependence on rival Samsung.
However, according to a report released by the Wall Street Journal recently, LG's production of high-quality OLED panels is still quite "difficult", which disrupts the schedule of Apple's original plan. The Wall Street Journal quoted “informed sources” as saying that there were problems with LG's production. This suggests that LG may not be ready to start mass production of the iPhone panel in July, lagging behind the launch of the new iPhone. In view of this, there are still different views on whether Apple should include LG Display as an iPhone screen supplier this year.
Why can't LG meet Apple's OLED screen requirements?
The key issue is that LG Display has long focused on the production of TV-size OLED panels. In this respect, it is indeed a leading global supplier. However, whether or not it is also the industry leader in smart phone size screen production cannot be determined. Because Apple has very high requirements for OLED screen quality, it may be difficult for LG to meet the exact specifications required in the short term. As we all know, Google Pixel 2 XL is using LG's OLED screen, but there are obvious problems with color displacement and burn-in. Google's constant complaints in order to calm users, not only software updates, but also have to extend the warranty for another year .
In fact, as early as in 2017, it was reported that before 2019, LG could hardly supply OLED mobile phone screens for Apple, and the earliest time had to wait until December of this year when it was possible to actually reach an agreement, stabilizing Apple’s supply of OLED screens. . LG's challenge in the production of OLED mobile phone screens is not small. Analysts at Susquehanna, an investment company, said that this year, LG can only provide 20% of OLED display for the new iPhone.
What is the impact of the Samsung OLED mobile phone screen?
In any case, this is really not very good for Apple, especially in terms of bargaining. After all, if you only work with a supplier, I believe that Apple itself could find itself in a very unfavorable position in bargaining, eventually leading to OLED screens becoming one of the most expensive components in high-end iPhones. IHS Markit had previously estimated that the cost of the iPhone X's OLED panel is more than twice that of traditional LCD panels.
If Apple has two OLED suppliers, the problem of high cost of screen components is well solved. In the field of smart phones, Samsung, as an Apple OLED supplier, has a stake in itself but is itself Apple’s major hardware competitor. However, in the area of display panels, LG is Samsung's main competitor, and negotiations between Apple and LG clearly help reduce costs.
When Apple started production of the iPhone X last year, Samsung was the only supplier capable of mass production of the required OLED panels. At the time, there were many difficulties in producing OLED screens. For example, in the initial manufacturing process, a single dust would fall off the entire screen, so it was affected by the yield in the early supply, and Samsung first guaranteed the OLED screen of its own Galaxy flagship. Capacity.
For LG, who has not had long-term experience in mass production of OLED mobile phone screens, it may face more difficulties. LG has been engaged in OLED TV panel production for many years and it is relatively mature in technology. However, these technologies require a relatively small size for mobile phone screens, because the mobile phone screen must not only optimize the touch screen, but also ensure a larger-scale yield, and the actual situation is even greater. Complex and difficult.
As early as 2016, Apple and Samsung for the first time reached an agreement on the supply of OLED panels. By the end of 2017, before the official release of the iPhone X, KGI analyst Guo Mingxi stated that Apple was “urgently seeking” a second supplier of OLED panels. Then in December 2017, LG finally reached an agreement with Apple to supply OLED mobile phone screens. At that time, many people thought that all problems of Apple's single supplier had been eased, which would help Apple gain more bargaining chips in the negotiations. However, it remains to be seen whether these goals can be achieved.
Anyway, does this have any effect on our average consumer? First of all, a single supplier leads to high OLED costs. Eventually, the price of the iPhone may not have any downward trend compared to last year. In addition, the supply of the iPhone X Gen 2 and iPhone X Plus may be slightly tightened, and it is still not known whether it can meet the demand smoothly.