Apple in ‘urgent’ need of finding iPhone OLED supplier, Samsung is sole supplier

Samsung Display makes the best smartphone OLED screens in the world, as evidenced most recently by the Galaxy S8 and Note 8. So it makes total sense that Apple is putting a heavy reliance on the company to supply displays for the upcoming top-tier iPhone set to be announced on Tuesday, which will herald Apple’s shift to OLED technology for its flagship smartphone.

According to the well-sourced KGI analyst Ming-Chi Kuo, Samsung’s position as the one and only supplier of displays for the iPhone 8 (or whatever it ends up being called) has put the company in a powerful position. AppleInsider reported on Kuo’s note to investors.

As the next iPhone event nears, no other company is capable of producing phone-sized OLED displays at the same scale and consistency as Samsung. With slimmed down bezels on all sides, the iPhone 8’s display will the phone’s true centerpiece, so Apple can’t afford any major deviations in quality.

LG has made a return to OLED technology with its brand new V30, but the company doesn’t need to worry about shipping anywhere near the same volume as the latest Galaxy smartphones. This dependence also allows Samsung to control pricing on the displays that Apple is buying — and there’s really nowhere else to go at the moment.

Kuo estimates that Apple is paying between $120 and $130 per unit, which is a significant hike up from the approximate $45 to $55 cost of each 5.5-inch LCD for the iPhone 7 Plus. Apple is certainly going to be passing that cost on to consumers — and then some. The New York Times recently reported that the iPhone 8 is likely to start at a price of around $1,000. Fancier screens certainly play a part in that, as do the facial recognition capabilities rumored for the phone and Apple’s pursuit of high profit margins.

Kuo says Apple is “in urgent need of finding a second source of OLED,” which would take some of that bargaining power away from Samsung’s display unit (which is separate from Samsung Mobile). It would also help resolve supply constraints; it’s expected that the iPhone 8 will be hard to come by during its initial launch phase in the coming weeks.

LG is the obvious go-to, and the Korea Economic Daily reported in July that Apple is pumping over $2 billion into LG Display to secure OLED panels for future iPhones. Google has also invested in LG’s display business, and the Pixel 2 XL is rumored to be manufactured by LG Mobile and use LG-sourced screens.

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