Apple Needs Samsung For New iPhone Technology

The latest report from Korea’s ET News is that Samsung’s display division has won the race to be the primary supplier for OLED display panels destined for a next-generation iPhone. Following Samsung’s weak guidance for Q4 2014 earnings, this advance order, likely to be in place for a number of years, will help stabilise the finances of the South Korean company.
Apple is one of the last manufacturers supplying high-end smartphones with LCD screens. While OLED does have some issues, it also offers vivid colors, a deeper black, lower power requirements, and a thinner construction.

iPhone 6S and 6S Plus Taptic Engine and 3D Touch diagram (image: Apple PR)

The interesting question is less about if Apple will make the switch, but when. Given the quality and visual impact of OLED displays on other handsets Apple will find it harder to match that quality in future iPhones using LCD screens. There may be one or two final hurrahs in place with LCD that we’ll no doubt see on the iPhone 7, but will Apple wait for the iPhone 8 and a 2018 release or will it push to get the OLED screens in place for the iPhone 7S?
The ‘S’ cycle of iPhone handsets is typically when Apple implements a major change to hardware (as opposed to design changes in the even-numbered years). Previous ‘S’ handsets have seen the introduction of 3D Touch and TouchID. The iPhone 7S is the logical time to introduce a brand new screen technology.
To do so, Apple will need to be confident that its OLED supplier can not only supply the volume of displays required, but also reach Apple’s quality threshold. Traditionally OLED displays have had a shorter lifespan and can exhibit features unwanted features such as burn-in of images. Apple will need confidence that the iPhone is not going to suffer these issues.

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Capacity also needs to be considered. Apple will be looking for over 200 million OLED displays per year. That is going to require investment, capital, factories and distribution. It’s unlikely that there is a secret OLED factory running just now to supply the iPhone 7. Both Samsung and LG are working on expanding their OLED facilities, presumably in anticipation of higher orders from smartphone manufacturers.
Only Apple switching could provide such a step-up in requirements. Watch for these factories to come online in early 2017 if the iPhone 7S is going to go with the newer display, or if iPhone fans will be waiting into 2018 for the screen technology almost every other manufacturer considers a standard choice.
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