Apple Struggling to Diversify OLED Suppliers for 2018 iPhone Lineup

Apple is reportedly having a tough time trying to diversify iPhone screen suppliers and break away from Samsung.

According to a new report from the Wall Street JournalApple’s 2018 iPhone lineup is likely to stick with OLED panels manufactured by Samsung, as Cupertino’s backup solution, LG, doesn’t yet have the production capacity to meet the required targets.

LG is apparently having a hard time aligning with Apple’s requirements, and “manufacturing problems have caused it to fall behind the schedule that many suppliers follow before beginning mass production for iPhones.”

If that is indeed the case, then not only will Apple need to rely on Samsung once again this year, it will be placing bigger orders due to not one, but two new iPhones requiring OLED panels.

It’s unlikely Samsung will move much on price because it doesn’t need to, which will have the knock-on effect of the new iPhone X probably costing as much as last year’s model. It could even end up making the 2018 iPhones less profitable for Apple.

Interestingly, Apple has ordered LG’s display division to work on a third round of OLED prototypes, something that most suppliers aren’t asked to do. If it pans out for LG, a supply chain analyst stated that it could contribute as much as 20% of the OLED screens that go into Apple’s new iPhones, while Samsung would pick up the other 80%.

This report states that Samsung’s OLED display is the most costly component found in the iPhone X, costing $97 USD of the estimated $376 that Apple spends on each unit. But if it can move more of its business to LG, it could eventually drive down costs on future iPhones, resulting in a cheaper product on the shelf.