Apple Wants OLED in iPhones, But Most Suppliers are not Ready Yet

Apple Wants OLED in iPhones, But Most Suppliers are not Ready Yet

Apple has big plans to outfit its next iPhone with organic LED displays, seeking to entice consumers with new technology that’s already been embraced by other high-end smartphone makers. The trouble is, according to Bloomberg, that the four main suppliers for such components won’t have enough production capacity to make screens for all new iPhones next year, with constraints continuing into 2018, people familiar with the matter said, presenting a potential challenge for the company.

OLED screens are more difficult to produce, putting Apple at the mercy of suppliers that are still working to manufacture the displays in mass quantities. The four largest producers are Samsung, LG, Sharp, and Japan Display. While Samsung is on track to be the sole supplier for the new displays next year, the South Korean company may not be able to make enough due to low yield rates combined with increasing iPhone demand. The supply constraints may force Apple to use OLED in just one version of the next-generation iPhone, push back adoption of the technology or cause other snags.

Apple plans to ship at least one new iPhone with an OLED screen next year, the 10th anniversary of the smartphone’s debut, people with knowledge of the matter said. A pair of other new iPhone models will likely feature screens that use older LCD technology, partly because there won’t be enough OLED displays to satisfy anticipated demand, according to KGI Securities analyst Ming-Chi Kuo.

Apple and Samsung have an exclusive OLED supply deal for 2017, people with knowledge of the agreement said. Still, that doesn’t guarantee the South Korean technology giant will have enough output to meet demand for the revamped iPhone. For example, Samsung’s OLED supplies have even been constrained for its own mobile division’s smartphones. A representative for Samsung Display declined to comment.

Apple’s initial OLED order from Samsung is for 100 million units over one year, according to people familiar with the agreement. Even so, Samsung will probably only be able to deliver a portion of that for the 2017 holiday period. The OLED screens ordered by Apple in the Samsung deal are for displays larger than 5 inches, a person familiar with the matter said. If Samsung sees supply constraints in its ramp up of OLED panels for the fall 2017 iPhone launch, Apple may not have another major provider to fall back on.