Updated July 30. Article originally published on July 29.
As tech geekerati prepare for the iPhone 12 launch later this year, Apple continues to leverage the supply chain to both enhance the iOS smartphone and lower Apple’s business costs. Once again, the battlefield is the screen, and once again Apple has maneuvered LG Display and Samsung Display in the same space.
Tim Cook, CEO of Apple Inc., arrives on stage during Apple Worldwide … [+]
Update July 30: With the LG Display order that covers the iPhone 12, Apple is not satisfied with two providers. China’s BOE is working on a flexible OLED display, something not expected on the iPhone 12 but strongly rumored for the next generation of iPhones. Carly Page takes a closer look at BOE:
“While Samsung will continue to supply approximately 80 percent of iPhone screens, rumors claim that a little-known company called BOE appears to become Apple’s second-largest OLED provider. Not only is this a sign that the iPhone 12 model of Apple’s lower cost is likely to make the leap from LCD to OLED this year, but it’s also a sign that Apple is looking to diversify which manufacturers it uses, and is possibly ready to enter the display market itself. ”
That would give Apple three different display providers. Undoubtedly, these will be distributed in multiple models (new, reconditioned and replacement for repair), but it gives Apple multiple opportunities to negotiate one of the most expensive parts of the iPhone.
Nikkei Asian Review’s new details on the iPhones’ screen support previous reports (including South Korea’s TheElec) that Apple is reducing its dependence on Samsung. Tim Hardwick reports:
“LG Display’s contribution is five times the volume of the previous year, according to a new Nikkei report. That’s great news for a division that has suffered six consecutive quarterly losses, and LG Display believes this will improve its finances considerably in the second half of the year – the year its OLED panel factories start operating at full capacity. “
Undoubtedly, having two suppliers for a key component like the display will make Apple take advantage of competitive prices, as LG and Samsung offer more work in later models. It also spreads the risk of supply problems; Having seen the impact of some vendor shutdown due to Covid-19 earlier this year, this is a sensible precaution.
This movement is also worth looking at with some hindsight.
First, LG Display picked up a small order from Apple last year, no doubt allowing Tim Cook and his team to assess the displays’ quality capabilities while they were in full production.
Second, it has been widely reported that Apple’s lower sales of the iPhone 11 family last year meant that it failed to comply with the minimum purchase order clause of its contract with Samsung, incurring a contractual ‘offset’ payment. With sales already down 25 percent across the globe in the global smartphone market, predictions for the iPhone 12 family’s final sales are more volatile than usual.
Presumably, reducing Samsung’s order reduces Apple’s exposure in the case of another weaker-than-expected year.
The four members of the iPhone 12 family are expected to be revealed at Apple’s traditional event in early September, which could be as early as September 8.
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