Bloomberg reports that Apple has started negotiations about OLED displays with Sharp for the next-generation iPhone. Apple is widely expected to release an iPhone featuring an OLED display next year.
According to Bloomberg’s sources, the OLED arrangement would depend on Sharp’s output capacity. Sharp would be one of Apple’s OLED display suppliers for the next-generation iPhone.
Sharp pledged to invest $566 million in the development of OLED production facilities and buy equipment for the factories based in Mie and Osaka. Production will not commence until the summer of 2018, however.
“Apple has unofficially or as a nod encouraged Sharp to go into it,” said Amir Anvarzadeh, Singapore-based head of Japanese equity sales at BGC Partners Inc., in a phone interview. “Apple’s general strategy is to increase the competition on the supply side, and dilute the risk exposure to one company.”
An analyst cited by Bloomberg believes this investment is Sharp’s reaction to Apple’s move. “Production isn’t likely to begin until the second half of 2018, so the impact on profit won’t be until after that”, he said.
Bloomberg supply chain analysts put Apple’s share of Sharp’s revenue at 27%, which seems to be significant enough for the manufacturer to make such an investment to serve a major customer’s orders.