Apple May Use an Unlikely Partner for Big iPhone Update
Apple reportedly plans to use a new display technology in an upcoming smartphone—with the help of an arch rival.
A Samsung subsidiary will supply Apple with organic light-emitting diode (OLED) displays for an upcoming iPhone, Korean media outlets are reporting, according to tech news site Digitimes. The deal, worth $9 billion, involves Samsung Display shipping up to 92 million OLED screens to Apple in 2017, according to the report.
The report doesn’t say how many units Samsung Display will ship next year.
While neither Apple (AAPL) nor Samsung Display have confirmed the agreement, Apple has been rumored over the last several months to be working on a new iPhone that could come with OLED technology. In the past, Apple has relied on liquid crystal displays (LCD) for its screen technology, but OLED has gained traction over the last couple years in mobile devices because of its better color and flexibility. For example, Samsung is offering OLED technology in its upcoming Galaxy S8 phone.
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There are rumors that Apple plans to introduce three new iPhone models this year. Two of those will be modest upgrades to last year’s iPhone 7 and iPhone 7 Plus—and be named iPhone 7s and iPhone 7s Plus, respectively. A third model would come with the OLED screens and feature an updated design, according to reports.
While other smartphone makers have used OLED panels in recent years, Apple hasn’t done so. While the company hasn’t commented about why, some reports have suggested that suppliers couldn’t make enough screens to fill Apple’s demand. Apple has therefore been forced to wait until manufacturers could create enough screens.
Still, Apple has few OLED suppliers to choose from, and Samsung Display is widely viewed as a leader in OLED screen production. Apple, which battles Samsung for smartphone sales and has waged patent battles against it, likely has little choice, therefore, but to do business with Samsung Display for at least part of its supplies.
According to Digitimes, the Apple deal has forced Samsung Display to dramatically ramp up its OLED panel production, and the company has been working to expand capacity. Samsung Display is reportedly converting an Asian LCD screen factory to OLED production.
Neither Apple nor Samsung Display immediately responded to a request for comment from Fortune about the Digitimes report.