Samsung to supply Apple with 160 million OLED screens for the upcoming iPhone 8: Report

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Apple has placed an order for 60 million units of flexible OLED panels from Samsung, in addition to the 100 million it had already ordered last year as part of a three year contract awarded to Samsung. The additional screens are costing Apple a whopping $4.3 million, bringing the cost of each panel to roughly $71. In comparison, the LCD panels used in the iPhone 7 costs Apple $40, so expect the next iPhone to definitely cost more than the current one. There’s already rumours the iPhone 8 would be touching the $1000 mark, and Apple’s order for the additional panels just seems to add more weight to it.

Apple has been using the IPS-LCD type panels for its iPhone since the first generation. IPS panels have the advantage of adhering to the sRGB colour gamut. Their obvious downside is the impact they have on battery life, since the entire backlight must be turned on for the panel to work. OLED panels, in contrast, are more battery efficient because each pixel on an OLED panel has its own LED backlight so it doesn’t need to be on in order to render the colour black.

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Apple’s recent moves have been indicating that the next iPhone might indeed cost more than a $1000. Recently, Apple joined the Wireless Power Consortium, substantiating to some extent that the next iPhone might incorporate wireless conductive charging. If that is the case, Apple would need to build serious heat shields for internal components which would significantly add to costs. Now with an order for $71 OLED screens (60 million of them) it’s looking more and more likely we’re going to see a very expensive iPhone very soon.

It is interesting to note that Apple has ordered 160 million OLED screens and if the company sells about 200 million units a year, it would seem like Samsung is supplying screens for 80 percent of the inventory. With a three-year contract in place, and Samsung controlling 95 percent of the world’s OLED supply, it would be very interesting to see how Samsung plans to keeping up with the demand of not just the world’s most sold phones in conjunction with the needs amongst its own lineup.

Apple’s choice to go with the industry leader of OLED to supply the large amount of screen required is a good one. Apple had in the years past experimented with smaller companies to supply various components, which did not work out so well for them. There was the case of GT Advanced Technologies, which won a multi-year contract from Apple to supply the Sapphire glass screens for the Apple Watch, but the company ended up filing for bankruptcy before it could even ship out the first consignment. Similarly, back in 2012 when Samsung Display terminated its contract with Apple due to the ongoing legal hostilities between the two companies, the Cupertino company turned to various other manufacturers to meet their demands. Eventually, Sharp was bought out by Foxconn and while there were plenty of rumours last year that Apple would invest in AUO to help them develop an AMOLED production facility, we got word that Apple instead signed a contract with Samsung.

Samsung has a strong production-history, having always met the demand in the market. Given that Apple had signed the contract last year with Samsung, it is likely that a large chunk of Apple’s order is already in production, if not already produced.