Tech giant Apple is eyeing LG as a second source of supplier for OLED panels to be used in iPhone X, ending sole reliance on Samsung. Using LG as an alternative supplier will help Apple produce phones quicker and cut costs.
Bloomberg reports that LG will supply between two million to four million OLED displays in the initial deal, post which it will attempt to increase its capacity. For comparison, Samsung’s initial deal with Apple was to make about 100 million OLED displays to be used in iPhone X production.
LG’s name popped up in several reports in Apple’s quest to secure a second supplier, as the company made a return in producing OLED displays for the V30. But the quality of the V30 display isn’t as good as Samsung’s OLED displays in its Galaxy smartphones, and LG’s smaller production capacity is well-known.
‘Regarding the OLED supply deal for Apple's iPhone X, nothing has been set in detail. When anything is confirmed in detail, we will announce it, or [otherwise an announcement will be made] in a month,’ said LG in a regulatory filing in December last year.
In January, Apple is expected to have paid LG $2.7 billion as an advance payment for OLED panels.
Apple is set to announce three new models this year including an ‘iPhone X Plus’, or whatever the company ends up calling it, with a 6.46-inch OLED screen while retaining the same size as the existing 5.5-inch iPhone 8 Plus. Just like with the iPhone X, the Plus’s top and bottom faces will be reduced, enabling Apple pack a much larger display into a phone about the same size as the current Plus models.
Apple has ordered more screen panels for the iPhone X Plus than any other model. It forecasts 45 million 6.46-inch panels, about 25 million panels for the 5.8-inch iPhone X successor and 30 million 6.04-inch LCD screens for the new lower-priced flagship, claims a report in the Korean publication, The Bell.
According to the supply chain sources, these forecasts are always subject to change and Apple has always adjusted orders in response to customer demand. But, the forecast numbers certainly indicate that Apple wants iPhone X Plus to be the biggest and most popular phone in 2018.
Earlier this year, it was also said that Apple is designing its own power management chips for iPhones to end dependence on its current UK-based supplier Dialog Semiconductor. Power management chips are most crucial and costly components after processors and modems.
Currently, power management chips for the iPhone, iPad and Apple Watch are now exclusively designed and made by Dialog. Apple accounted for approximately 74 per cent of Dialog's revenue in 2016.
By manufacturing its own chips to integrate software and hardware components, Apple aims to be in a strong position by offering products that can be differentiated from top rivals such as Samsung Electronics and Huawei Technologies.
The new power management chips would be the most advanced in the industry and could have processing capabilities, meaning iPhone users could expect devices capable of delivering better performance on lower power consumption, the report noted.
According to media reports, the new chips will be manufactured by Taiwan Semiconductor Manufacturing Co., which has been Apple's sole supplier manufacturing core processor chips for iPhones since 2016.
In 2016, TSMC was Apple’s top vendor, contributing 17 per cent to the Taiwanese chipmaker's overall revenue. According to Bernstein Research, the contribution is expected to grow around 20 per cent in 2017 and continue to rise in 2018.