Apple opts for OLED screens for entire 5G iPhone range

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July 7, 2020

TAIPEI/TOKYO/OSAKA — Apple will use OLED screens for all its forthcoming 5G iPhones this year, going all-in with the world’s premium display technology for its flagship range in a move that is sure to spark new competition among suppliers of smartphone panels.

The U.S. tech giant plans to introduce four 5G iPhones with three different screen sizes — 5.4-inch, 6.1-inch and 6.7-inch — all of which will use the OLED technology, the Nikkei Asian Review has learned. OLED stands for organic light-emitting diode. The technology not only is more power-efficient, but also produces sharper contrast and deeper blacks than liquid-crystal displays.

Apple first used OLED displays in its iPhone X in 2017 but this is the first time it will use the more expensive technology for all models in its top-of-the-range phone.

Among the three iPhones launched last year, Apple’s bestselling iPhone 11 uses more affordable LCDs, but the iPhone 11 Pro and 11 Pro Max have OLED displays. Apple’s more affordable iPhone SE, which went on sale in April, also uses an LCD screen.

Production of OLED displays, which can be made curved or foldable, is still dominated by Samsung Display, the panel unit of Samsung Electronics. Samsung and other rivals of Apple, including Huawei, Oppo and Vivo, already use OLED displays in their premium smartphones.

Apple will still not be able to use a full-screen OLED display because it still needs to integrate its facial recognition function, known as Face ID, at the top of the iPhone.

“The four new iPhones will all be equipped with the flexible OLED displays. However, there will still be a notch, or “fringe,” on the top of the iPhone, because Apple was unable to integrate the Face ID module into the display,” an executive-level source told Nikkei. Face ID was first introduced with the iPhone X in 2017.

Apple’s decision is a blow to its longtime LCD screen supplier Japan Display, which earns around 60% of its revenue from selling LCD screens to Apple. Japan Display, has had net losses for six straight years, lags behind competitors in OLED development, only a relatively few OLED screens for wearable devices.

Another Apple screen supplier, LG Display, started to produce small numbers of OLED displays for iPhones last year.

“Apple has no choice but to turn to OLED displays because its competitors have already done that, and of course every Apple shift in technologies will have huge impacts on its suppliers,” said Eric Chiou, a veteran display analyst with TrendForce. “But we don’t think [Japan Display] will die suddenly, as Apple is still very likely to continue to adopt LCD screens not only in its old models but also its more cost-effective models, looking forward.”

Japan Display declined to comment.

TrendForce forecasts that OLED screens will be on half of all new smartphones as early as 2022. Another research company, Omdia, previously known as IHS-Markit, predicts that by 2023 OLED screens will be a mainstream feature and that more than 50% of smartphones will use such displays.

For 2020, Samsung is expected to have 74% of the market for OLED displays while China’s BOE Technology is expected to have a 9% market share, according to TrendForce.

Industry experts say BOE is catching up in terms of production capacity and quality. Its OLED displays are already used by many Chinese smartphone makers, including Huawei, Oppo, Vivo, and Xiaomi.

Apple is still certifying BOE Technology Group as an OLED supplier for iPhones, in a move to reduce its reliance on Samsung, Nikkei earlier reported. The Chinese display maker has not yet met the U.S. company’s standards for its latest iPhones this year, but it still has a chance to enter the supply chain later, sources said. BOE is already an Apple display supplier for MacBook laptops and iPads but, is still not a supply for the iPhone.

However a number of Japanese and Taiwanese companies that were once leading display makers, including Japan Display, Sharp, Innolux and Au Optronics, are not big players in OLED technology. Many have struggled to make a profit amid a glut in the LCD market and have not been able to make the big capital investments needed for OLED technology.

As well as going all-in for OLED displays for its 5G iPhone, Apple will for the first time not include a charger in the box for the upcoming new iPhones and iPads this year, sources told the Nikkei Asian Review.

Nor will Apple offer wired earphones, they said, as Apple tries to further promote its wireless AirPods.

“To lower the cost a bit is one reason, but not necessarily the most important one… The reason why Apple does not include those two accessories is also because a lot of existing iPhone users already have many of them over the past few years,” according to a source with knowledge of Apple’s thinking.

Apple declined to comment.

Apple’s move could trigger other smartphone rivals to follow suit. For instance, after Apple discontinued the 3.5 mm headphone jack for its iPhone 7 range in 2016 other smartphone manufacturers, including Samsung, Huawei and Oppo, did the same for some of their premium models, market watchers said.

Production of OLED displays, which can be made curved or foldable, is still dominated by Samsung Display, the panel unit of Samsung Electronics. Samsung and other rivals of Apple, including Huawei, Oppo and Vivo, already use OLED displays in their premium smartphones.

Source:https://asia.nikkei.com/Business/Technology/Apple-opts-for-OLED-screens-for-entire-5G-iPhone-range