[THE INVESTOR] Apple is facing a bevy of challenges in its attempts to adopt organic light-emitting diode screens for the iPad. Industry sources say the firm appears to be grappling with high panel prices and supply shortages.
“OLED prices are almost double those of LCDs. And the recently slowing tablet sales tell us that customers are unlikely to want to pay more for pricier devices,” Brian Huh, senior analyst at IHS Technology, told The Investor.
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Another factor hampering Apple's OLED plans is Samsung's dominance in manufacturing these panels. Samsung Electronics currently uses OLED displays for almost 70 percent of its smartphones including the high-end S series. This is made possible by Samsung Display, which accounts for more than 95 percent of the OLED market for mobile devices.
On that note, Samsung will be supplying a combined 160 million panels for the first OLED iPhone this year; starting with the partial adoption for the iPhone 8 in September. Apple aims to use OLED screens for all new iPhones by 2019.
But because Samsung has plans to launch tablets and laptops with OLED screens only this year, and since Samsung Display is already producing OLEDs at full capacity, Huh noted that Samsung's display-making affiliate would not place priority on supplying for tablets.
Apple may consider differentiating itself from Samsung tablets that use rigid OLEDs by adopting flexible OLEDs, but the supply for these advanced panels are also already tight due to demand for OLED smartphones.
Some sources consequently predict the iPad’s OLED adoption could come when LG Display, the largest LCD supplier for Apple, starts full-fledged OLED production.
LG Display, which failed to adopt the OLED screen for its sister firm LG Electronics’ new flagship smartphone LG G6, is making all-out efforts to elevate the yield rate seeking to become a secondary OLED supplier to the iPhone maker possibly from next year.
“LG Display’s yield rate is yet to meet Apple’s strict criteria. Full-scale production is expected to start later this year when its new Gumi plant (in North Gyeongsang Province) is upgraded,” said an industry source close to the matter on condition of anonymity.
By Lee Ji-yoon and Kim Young-won