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Apple wants to cut iPhone price by getting a second supplier for OLED displays

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The steep fall in the Smartphone market is not leaving manufacturers at rest as they fight for a space to win the most possible sales quota. Apple whose latest flagship, iPhone X is struggling to meet the initial expectation may have found a lead to cut down the price of its high-end smartphones to drive sales. The California-based company is almost done securing a deal with a second supplier for the organic light-emitting diode (OLED) screens regarded as the most expensive component in its high-end iPhones, Bloomberg reports.

A second OLED screens supplier for Apple means the company will land potentials to reduce its cost of production and reliance on South Korean Samsung Electronics Co. Apple’s new source is Samsung local rival LG Display Co. and the company will be supplying around 3 million OLED display units, which is relatively small compared to Apple’s sales. The volume is subject to grow over time, according to the report. This source transition would enable Apple to negotiate the price with Samsung, currently the only supply of OLED displays for Apple’s key flagships.

Apple is expected to get significant supplies of OLED displays from LG for its iPhone models next year. And both parties are set to benefit massively from the deal. While Apple is fighting slump sales in its smartphone market, LG is in dire need of a fresh revenue source as it battles LCD price fall.

From Bloomberg’s report, LG is interested in supplying all the screens Apple will need for its iPhone models, but the company may lack the capacity to achieve that yet. Apple will be using the first OLED display supplies from LG to produce a new model of iPhone to be released this year. The announced supply is said to be in two batches, with the first shipment expected next month, July. While information about the deal was leaked by people familiar with the matter, LG Display and Apple have refused to make a comment.

Among the three smartphones Apple is planning to release this year, two would be coming with OLED screens. It is not clear if one would be based on supplies from LG. Apple has not indicated any plan to adopt OLED screens for all of its iPhone models this year, that’s not likely, perhaps, next year. But the company’s primary focus now is to have more options for OLED supplies.

LG Display has invested billions of dollars in research for the next-generation technology and the result is yielding something thinner than LCDs with more accurate colors. However, the company has fallen behind Samsung in securing a deal with Apple for iPhone’s OLED display supplies. Meanwhile, Apple is also in talks with BOE Technology Group Co for the same purpose – to supply iPhone’s OLED displays.

A major challenge faced by LG Display is its current production capacity which is far less than Apple’s number of sales. But the production volume would subsequently improve if the deal pulls through, leaving Samsung’s market share far less than that of LG Display.

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