While Samsung seemed to be holding onto the rope to provide the vast majority of Oled screens for the next iPhone 12s, Apple has finally decided to trust LG a little more. The Cupertino company would have placed an order for 20 million screens for its entire range of devices.
L’iPhone 11 Pro // Source : Unsplash / William Hook
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Since the inauguration of the iPhone X, Apple’s first Oled smartphone, the Californian company had gotten into the habit of sourcing from Samsung Display. A dependence that did not necessarily please internally, especially when we know the legal battles that the two giants have been able to engage in patent issues. Admittedly, it was not with the Display branch of Samsung, but all the same.
Apple then tried last year to distance itself a little from Samsung by bringing in other players such as LG, the other major manufacturer of Oled screens, or the Chinese BOE, which until then supplied Apple with LCD screens. Orders down for the second as Apple placed its trust in the two newcomers for its future iPhone 12. If LG has met Apple’s qualitative expectations and passed the tests successfully, BOE was finally excluded from the race . Quality visibly takes precedence above all for Apple, even before competitive prices, but a return of the third player is not to be excluded in the next generation, according to observers. Support from the Chinese government in the company’s research and development could make it a heavyweight in the sector soon.
iPhone 11: 90% OLED panels for Samsung, 10% for LG
It was therefore necessary to redistribute the orders, but between two actors only. LG Display has recently given itself the strengths to fight on an equal footing with Samsung. The South Korean company has invested more than two billion euros to expand its factory and be able to meet the expectations of its home products (TV screens, computers, smartphones, etc.) and supply its customers like Apple.
On the iPhone 11 Pro and 11 Pro Max, LG Display was only responsible for 10% of the OLED panels, noted PhoneArena against 90% for Samsung. The next iPhone 12 vintage could be a game-changer.
Apple wants to avoid the “Samsung tax”
According to Nikkei, the Cupertino company would have ordered 20 million Oled screens from LG Display, five times the volume of last year. Initially, the Korean company was to focus on the next iPhone 12 with 6.1-inch screen, which it would share the supply of panels with Samsung Display. The latter was to equip the 5.4 and 6.7 inch iPhones. The Japanese media explains, however, that Samsung will remain the main supplier with an order volume of around 60 million units, a total substantially identical to previous requests from Apple. And this, while the apple brand should add at least one iPhone reference with an Oled screen.
By entrusting its Oled screens to Samsung, Apple had set itself a major constraint: to pay fees to its supplier if the panel orders fell below a rate determined beforehand. As sales of the iPhone XS and 11 Pro were lower than expected, while sales of the iPhone XR and 11 with their Liquid Retina (LCD) display soared, Apple found itself trapped. Hence his need to find another supplier who would not have a monopoly. In addition, Samsung also supplies other components of the iPhone as well as being its main rival in the smartphone market.
The iPhone 11 screen // Source: Frandroid
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To impose a little more LG Display in the battle obviously has an economic interest for Apple which diversifies its sources and avoids dependency. But after the crisis due to the coronavirus and the slowdown in production, it also makes it possible not to put your fate in the hands of a single factory. It remains to be seen what becomes of Japan Display, the Japanese factory in which Apple has invested $ 100 million to help it survive after having already paid more than a billion dollars in advance. Supplier mainly of LCD screens and switched too late to Oled, the company missed the boat of the iPhone, Apple only ordering Retina screens for its Apple Watch. But the money invested probably did not have to be done without ulterior motive …
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