iPhone X Plus, iPhone X2 To Bring A $22 Billion Windfall For Samsung

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Samsung and Apple may be the fiercest rivals in the smartphone industry, but they are heavily dependent on each other. It’s no secret that the iPhone X’s gorgeous OLED display is made by Samsung. There is no other company capable of producing OLED panels in volumes large enough to meet Apple’s demands. The Cupertino company is going to almost quadruple the OLED display orders next year.

Apple to source nearly 200 million OLED panels from Samsung next year

Industry sources told The Investor that Samsung will supply 180-200 million OLED screens to Apple in 2018. That is almost four times higher than the 50 million panels the Korean company supplied for the iPhone X this year. It indicates that Apple has doubled down on the OLED technology, and wants to dominate that area. Not all the OLED panels produced next year will be intended for the iPhone X, though.

KGI Securities analyst Ming-Chi Kuo has confirmed that Apple would launch three iPhones next year. One of them, likely to be called iPhone 9, would feature a 6.1-inch LCD screen and would be priced in the same range as the iPhone 8. The other phones will be the second-generation iPhone X with a 5.8-inch OLED display and a larger 6.5-inch iPhone X Plus. Both of them would cost more than $1,000.

The second-generation iPhone X and its larger sibling iPhone X Plus would launch in September/October 2018. Apple’s OLED iPhones will generate a lot of revenues for Samsung. According to IHS Markit, a single OLED panel including the cover glass and touch sensor costs Apple $110. It translates into $19.8 billion to $22 billion revenue for Samsung Display in 2018 alone.

To put those revenues in perspective, it will be like selling roughly 22 million Galaxy Note 8 phablets without having to worry about manufacturing and marketing them. The Note 8 costs buyers $929 for the base model. Samsung also makes other components for iPhones as well as other smartphone vendors. It means the Korean company generates money from even non-Samsung phones.

Sources told The Investor that Samsung has been able to increase the supply to Apple for next year because of improved yield rates at its A3 panel production site. Initially, the yield rates were merely 60%, which improved to nearly 80% in the latter half of this year. The yield rates have now reached 90%. It’s quite impressive that Samsung has achieved such a high yield rate while maintaining the highest quality standards.

Apple also working with LG Display on OLED technology

Samsung will not remain the sole supplier of OLED panels to Apple for long. The Cupertino company has teamed up with LG Display to help the latter ramp up its OLED capabilities by 2019. The first iPhones with LG’s OLED screens will likely hit the store shelves in 2020. Even if Apple moves completely from Samsung to LG Display in the years to come, Samsung will still be supplying many other components used in the iPhones.

Samsung has extensive expertise in the OLED technology. It has been selling OLED smartphones for years. But it came as a huge surprise when display tests revealed that the iPhone X’s OLED screens were far better than Samsung’s own Galaxy S8 and Note 8 phones. The iPhone X screen, made by Samsung, has been praised for its brightness, color accuracy, white balance, and saturation. Apple has optimized and modified the iPhone X’s display for color accuracy and saturation to beat the Galaxy Note 8.

2018 iPhones to offer better battery life

Ming-Chi Kuo has told investors that the next year’s OLED iPhones would feature a new battery technology to offer a better battery life. The iPhone X includes a two-cell L-shaped battery, which has a capacity of 2716mAh. Kuo says the second-generation iPhone X and the iPhone X Plus would feature a one-cell, L-shaped battery developed jointly by Apple and LG Chem.

The new battery design would provide enough room for Apple to include a 2900 to 3000mAh battery in the second-generation 5.8-inch iPhone X. The larger model is expected to pack a 3300 to 3400mAh battery. The increased battery size coupled with a more energy efficient A12 processor would help the upcoming iPhones offer more than a day of battery life. The 6.1-inch LCD iPhone would continue to use the same old rectangular battery to keep the costs down.

Chinese consumers prefer 256GB iPhone X model

Though many industry analysts have expressed concerns that the 10th anniversary iPhone sales have been below initial expectations, RBC Capital Markets analyst Amit Daryanani told investors that demand for the device remains robust in China and the US. Apple’s partners are now producing enough iPhone X units to offer the same-day or next-day delivery in most countries.

Daryanani said 62% of the prospective iPhone buyers in China wanted to buy the anniversary model. Most of them said they would purchase the 256GB version, which would boost Apple’s profit margins. The analyst’s survey revealed that even people interested in the iPhone 8 series and iPhone 7 series wanted to buy the highest storage variants.

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