Apple has agreed upon a deal with LG Display, which will supply OLED screens for the company’s upcoming iPhone models, according to a report by Bloomberg. Apple currently sources OLED screens for its Apple iPhone X from Samsung Display, and Apple reportedly wants to reduce its dependence on Samsung in order to gain some bargaining power. Samsung is also Apple’s biggest rival in the smartphone space globally, which could be another factor in Apple’s decision to branch out with its component sourcing.
The report also states that LG Display will initially only supply between 2-4 million units according to Apple’s specifications, which is a small percentage of the total supplied units. This means that Apple will still be sourcing most of its screens for its upcoming smartphones from Samsung Display. However, the supply from LG Display will gradually increase as LG improves its production capabilities. The purpose of the move is largely a hint to Samsung that it does not hold all the cards.
OLED screens are significantly more expensive to manufacture than LCD and LED screens, but are also superior in many ways. The biggest advantage is better energy efficiency, while color quality and black levels are also significantly better. Most high-end smartphones use OLED screens today, while budget smartphones continue to go with the cheaper LED and LCD screens to maintain pricing levels.
Samsung and LG are the only major manufacturers of OLED screens for smartphones currently, of which only Samsung has the capacity to manufacture on a large scale. This has made the market largely dependent on Samsung Display, which has been able to use its position to dictate pricing terms. The high price of sourcing the OLED screen is part of the reason for the Apple iPhone X’s high price.
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LG is likely to supply all the OLED screens for one of the new iPhone models slated to launch this year, while Samsung will be supplying the screens for the other models. There are expected to be a total of three iPhone models launched this year, of which two will sport OLED screens. LG also currently supplies the screens for the Google Pixel 2 XL, which it also manufactures as an OEM for Google.