Samsung is the sole supplier of OLED screens for Apple’s iPhone X. The Korean company reportedly supplied 50 million OLED panels to Apple last year. But Apple is looking to diversify its supplier base to reduce its reliance on Samsung. Sources familiar with the matter told The Investor that Apple was in advanced talks with LG Display to sign an OLED supply deal. The iPhone X Plus rumors suggest LG would supply OLED panels only for the 6.5-inch model, which means Samsung would continue to manufacture screens for the iPhone X and this year’s 5.8-inch iPhone.
LG Display to supply 15-16 million OLED panels for the iPhone X Plus
It’s too early to say what this year’s 6.5-inch OLED iPhone would be called. For the sake of convenience, let’s refer to it as the iPhone X Plus for now. LG Display currently makes only LCD screens for the iPhone 8 and 8 Plus. Following the latest iPhone X Plus rumors, LG Display shares skyrocketed to a one-month high on Wednesday.
Under the terms of the deal, LG will reportedly supply only 15-16 million OLED panels for the jumbo-sized iPhone in the second half of 2018. It may be a small number, but it’s a big victory for LG. The Korean publication added that LG would start producing OLED screens for Apple in the second quarter at it E6 plant in Paju, Gyeonggi. The facility has two OLED production lines with a combined capacity of 6 million panels per month. But they haven’t yet achieved their full capacity due to low yield rates.
There have been speculations for more than six months that Apple was negotiating an OLED supply deal with LG Display. Last month, LG had to clarify in a regulatory filing that it wasn’t making screens for the iPhone X. The Korean company did not deny the rumors, though. It said, “When anything is confirmed in detail, we will announce it, or [otherwise an announcement will be made] in a month.”
It means LG could officially announce the deal sometime soon, but it may not mention Apple as a client because of the Cupertino company’s strict secrecy policy. In July last year, Apple reportedly paid LG Display $2.7 billion as an advance payment for OLED screens. At the time, reports claimed that LG would start shipping panels in 2019. But it seems like the company would start supplying a year earlier than expected.
The Apple deal could help LG secure more OLED contracts with other smartphone vendors in the future. LG’s 15-16 million units seem small compared to Samsung, which currently makes 10 million units per month for the iPhone X. LG and Samsung are fierce rivals, and they were among the first to adopt the OLED technology. Over the last few years, the two have sued each other many times over display technologies.
It would be interesting to see how good the LG-made iPhone X Plus displays would be. The iPhone X’s Samsung-made OLED screen has been rated the best in the world, even better than Samsung’s own Galaxy S8 and Note 8 screens. On the other hand, the Google Pixel 2 XL’s OLED display has suffered from a lot of issues such as image discoloration, burn-in, and others. Google sources the Pixel 2 XL screens from LG Display.
It’s difficult to say whether the Pixel 2 XL’s display problems were LG’s fault. Google has fixed most of them via over-the-air software updates. Anyway, LG Display must have learned a lesson or two from the Pixel 2 XL controversy. The iPhone X Plus is still several months away, giving LG plenty of time to address any issues.
iPhone X Plus rumors hint at new battery technology
KGI Securities analyst Ming-Chi Kuo has learned from sources within the supply chain that Apple would launch three iPhones in the second half of 2018. One of them is said to sport a 6.1-inch LCD panel and would be in the same price range as the iPhone 8. The iPhone X successor would sport a 5.8-inch OLED panel. There would also be a larger 6.5-inch iPhone X Plus with an OLED display. We will keep you posted as new iPhone X Plus rumors emerge.
Though the iPhone X Plus rumors are still in their early days, it is expected to have better features than the 5.8-inch OLED version. Apple has traditionally differentiated the Plus variants from their smaller siblings. Kuo has also told investors that the OLED iPhones would come with a new battery technology to provide a longer battery life. Unlike the iPhone X’s two-cell, L-shaped battery, the upcoming devices would feature a one-cell, L-shaped battery.
The new battery technology would allow Apple to pack a 2900mAh to 3000mAh battery in the 5.8-inch model, and a 3300mAh to 3400mAh in the larger iPhone X Plus. The bigger battery coupled with a more energy-efficient A12 chipset should boost the battery life of the upcoming iPhones. However, the 6.1-inch LCD iPhone would keep using the rectangular battery to keep costs down as it will have a lower price tag.
Samsung to supply 180-200 million OLED screens to Apple
Last month, industry sources told The Investor that Apple would source 180 million to 200 million OLED panels from Samsung in 2018. It is four times higher than the 50 million panels Samsung produced for Apple last year. The huge order indicates that Apple is doubling down on the OLED technology for its flagship iPhones.
Samsung is estimated to generate $19.8 billion to $22 billion in revenues from OLED panels for iPhones alone this year. According to IHS Markit, one OLED screen including the touch sensor and cover glass costs Apple roughly $110. Assuming the same cost structure applies to LG as well, LG Display would generate $1.65 billion to $1.76 billion in revenues from the iPhone X Plus OLED panels.