“At least one company in Apple Inc.’s supply chain is already reaping the benefit from plans to outfit next year’s version of the iPhone with a brighter, higher-definition screen,” Alex Webb and Ian King report for Bloomberg.
“The first evidence came last week when Applied Materials Inc. reported an almost fourfold leap in orders for equipment to make displays, an early sign producers are retooling their manufacturing to meet Apple’s demand for a new kind of organic light-emitting diode, or OLED, screen. The technology will allow Apple to upgrade the biggest component of its main product,” Webb and King report. “‘Some tooling or machinery orders now set up suppliers for the fall of 2017,’ said Gene Munster, a Minneapolis-based analyst at Piper Jaffray. ‘It sets up the iPhone in the fall of 2017 to be more of an impactful upgrade than the fall of this year.'”
“For Applied, the flood of orders isn’t a one-quarter event, its management said. That highlights both the scale of investment needed to produce such technology and the amount of capacity needed to supply Apple. Applied, the biggest maker of machines that manufacture screens, said new orders for that division totaled $700 million in its second quarter, close to what it normally gets in a year. Orders were $180 million in the three-month period a year earlier,” Webb and King report. “‘It’s not a peak or a one-time event,’ said Applied Materials Chief Executive Officer Gary Dickerson. ‘This is going to be sustainable growth. We all know who is the leader in terms of mobile products.'”
Read more in the full article here.
MacDailyNews Take: iPhone 7 is the Rodney Dangerfield of iPhones. No respect.
We’ll be getting Apple flagship iPhone this year, too. There’s more to iPhone than its display – which is already excellent.
I’ll bet the Bank of Apple financed much of the tooling Applied Materials will need to fabricate OLEDs on this scale. Upfront cash infusions to suppliers lower the risk to suppliers and secured production first run priority for Apple. This is one of Apple’s most effective supply chain weapons. It’s also a very effective use of that cash.