Thursday 23 May 2019

Apple unlikely to use OLED screens for all its iPhones

iPhone X uses an OLED screen
iPhone X uses an OLED screen

Min Jeong Lee and Debby Wu

Analysts are pouring cold water on a report that Apple plans to use next-generation, OLED screens for all of its new iPhone models next year.

The article in South Korea's 'Electronic Times', if true, would be negative for major manufacturers like Japan Display and Sharp, which build LCDs that are used in many phones, but a positive for OLED technology makers like Universal Display. Japan Display shares fell as much as 21pc, the biggest intraday drop since its 2014 market debut. Sharp declined as much as 4.3pct. Universal Display shares surged as much as 18pc.

Representatives for Apple, JDI and Sharp declined to comment.

Currently, in the smartphone market, there are two primary types of screens: liquid crystal display, or LCD, and organic light emitting diode panels, or OLED. The iPhone 8 and older models use LCD screens, while the iPhone X uses an OLED screen. LCD screens are cheaper to build, while OLED screens reproduce colours much more accurately, but are difficult to produce.

There are several reasons why Apple's switch to all-OLED phones is unlikely. JPMorgan analyst Jay Kwon said it's too early for Apple to make such a decision and the OLED screens would make the devices more expensive, defeating the purpose of a cheaper LCD model due out later this year.

Using only organic light-emitting diode screens for iPhones would also be challenging, given the sheer volume that Apple sells: 216 million devices in 2017. Samsung Display, part of Samsung Electronics, is the sole supplier of OLED screens for high-end Apple phones, but the manufacturer also uses them for its own smartphones, limiting supplies. Other OLED screen makers, like LG Display Co, haven't shown the ability to churn out Samsung-like capacities.

While Apple has embraced OLED, most analysts said they don't see the switch happening in 2019.

"It is unlikely Apple will be releasing three OLED models next year," said Jeff Pu, an analyst at Taipei-based Yuanta Securities Investment Consulting.

Apple is on track to use OLED in two of three new models later this year

"Ultimately, the plan is for Apple to go full OLED on its iPhones as far as I know but whether that's going to happen at this point is a question mark," said Jerry Kang, a senior principal analyst at IHS Markit, based in Bundang, South Korea. "Apple hasn't been able to expand on its iPhone X production because of market demand and price issues." (Bloomberg)

Indo Business

Also in Business