Price of Samsung’s OLED display panels leaves Apple with ‘urgent need’ to find alternative suppliers

White Apple iPhone 7 Plus smartphone - next could feature wireless charging

In a note sent to investors and obtained by AppleInsider, noted Apple forecaster Ming Chi Kuo says the Cupertino-based smartphone maker has an “urgent need” to find a second OLED panel supplier. Ming says he suspects Apple is paying Samsung Display, Samsung’s screen manufacturing subsidiary, between $120 USD and $130 USD for each OLED screen it buys from the company.

To put that number in perspective, Apple currently pays between $45 and $55 per LCD display unit it uses in the assembly of the iPhone 7 Plus.

The increased unit cost associated with obtaining OLED panels is likely one of the reasons the iPhone 8 will be Apple’s most expensive to date. In a recently published report, the New York Times says the iPhone 8 will start at $1000 USD.

A second supplier would take away some of the negotiating power Samsung Display has over Apple. Unfortunately for Apple, Samsung Display currently controls 95 percent of the smartphone-sized OLED panel market. It is the only firm that has the capacity to manufacture OLED display units at the scale and quality required by Apple.

Apple recently extended a $2 billion investment offer to LG’s Display, hoping to help the LG subsidiary accelerate the expansion of its OLED panel manufacturing operations. However, that investment is not expected to bear fruits this year.

Source: AppleInsider