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Will Apple Include OLED Displays in iPhone by 2018?

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Apple Inc.AAPL is reportedly planning to switch to organic light-emitting diode (OLED) displays in iPhone by 2018. According to a Nikkei report, Apple has notified its suppliers about its plans so that they can ramp up their facilities accordingly.

The report states that in the initial phase Apple will be using a mix of LED and OLED displays as it can be challenging to produce OLED displays for all the iPhones.

OLED display is being increasingly adopted as it comes with improved brightness, contrast and efficiency compared with LCD or Plasma displays. Television sets have long been equipped with OLED displays and now even smartphones are catching up. Having an OLED display will not only enhance the iPhone display but will also reduce consumption costs as there will be no need for backlights.

However, these displays also come with drawbacks like a shorter life span compared to LCD display, and higher manufacturing costs. Apple will be weighing all these options before making its decision for a complete switch.

On the suppliers' front, it is expected that Samsung SSNLF and LG Display Co., Ltd. LPL are likely to be the primary suppliers for iPhone OLED as they already have the facilities for production. Apparently, Samsung has already received the contract for providing OLED displays for the Apple Watch. Prior to Samsung, LG had been the only OLED provider for Apple.

However, this may not be good news for other Apple suppliers. Companies like Japan Display who derive over 30% of revenues from Apple are likely to be hit the most unless they also enter the production of OLED displays and that too at competitive prices. This apart, suppliers like Sharp and Minebea are also likely to be affected, as both provide a decent share of LCD displays to the tech giant at present.

Nonetheless, some suppliers like Foxconn have been proactive in this matter. This can be inferred from Universal Display Corp.'s OLED CFO, Sidney Rosenblatt's comment a few days back. Rosenblatt had stated that "long-time Apple supplier Foxconn has ordered equipment for [OLED manufacturing] capacity in 2017". Even rumors about LG increasing its investment in OLED production had surfaced a few months back.

Android phones have been early adopters of this technology. Samsung had been the first to use OLED display back in 2010. Though Apple has refrained from the switch so far, it seems that years of research are now yielding results. Apple has been using OLED in its Watch for a while now. Perhaps the positive reviews from Watch users have prompted the company to take it to its flagship product.

Currently, Apple has a Zacks Rank #3 (Hold).

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APPLE INC (AAPL): Free Stock Analysis Report

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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