The South Morning China Post reports Apple is making moves to lessen its reliance on Samsung’s OLED displays for the iPhone, and is negotiating with LG Display to become a second OLED supplier for their flagship handsets.
South Korea’s LG Display will initially supply between 2 million and 4 million units, small relative to Apple’s sales, as it continues to work on ramping up capacity, said one of the people, who asked not to be identified because the matter is private.
That would, however, help Apple gain leverage in price negotiations with Samsung, the sole supplier of OLED displays for the iPhone X and Apple’s primary rival in smartphones.
While 2 to 4 million is a small portion of the OLED screens Apple will require for its much-rumored 6.5-inch “iPhone X Plus,” Putting LG into the supplier mix will give Apple additional leverage when negotiation display costs with Samsung.
The deal would also be beneficial to LG Display, as it is searching for a fresh source of revenue as it faces a continuing slide in the price of liquid crystal displays (LCDs).
“Securing a second supplier for OLED screens is crucial for Apple as it will allow the company to reduce its reliance on Samsung, which is currently the sole supplier,” said Jerry Kang, a senior principal analyst at IHS Markit. “At the same time, it will help accelerate a broad adoption of OLED screens. More suppliers means more volume, and in turn, lower pricing.”
The report indicates the first OLED screens from LG Display will be used in a single model of Apple’s 2018 iPhone lineup. LG Display will be working to supply all the screens for that particular model, though it may not be able to achieve that. The shipment is subject to two layers of approval, the first of which is expected around July, the report’s sources said.