“Apple Inc.’s efforts to line up a second supplier for its high-end smartphone screens — and reduce its dependence on Samsung Electronics Co. — have hit a hurdle because LG Display Co. is struggling to make them, according to people familiar with the matter,” Yoko Kubota and Takashi Mochizuki report for The Wall Street Journal. “South Korea’s LG Display is working to boost production of organic light-emitting diode displays in hopes that it can provide some of the screens for iPhones set to be released later this year, the people said.”
“However, manufacturing problems have caused LG to fall behind the schedule that many suppliers follow before beginning mass production for iPhones, which usually starts around July, the people said,” Kubota and Mochizuki report. “As a result, opinions within Apple are divided on whether LG Display can become a second source of OLED displays for the upcoming iPhones, one of the people said.”
“The Samsung-made OLED display is among the most expensive components in the iPhone X, costing Apple about $97 out of $376 in total estimated cost per device, according to an analysis by Fomalhaut Techno Solutions, a Tokyo-based consultancy,” Kubota and Mochizuki report. “Apple’s reliance on a single supplier for the screen means it has less bargaining power over its pricing—one reason for the iPhone X’s steep $999 price tag, analysts said.”
“LG Display was recently ordered by Apple to go through a third round of prototype production for the OLED smartphone screens, an extra step that most suppliers don’t go through for many components, the people said,” Kubota and Mochizuki report. “It currently is expected to supply as much as 20% of OLED displays for this year’s new iPhones, according to supply-chain analysis by Susquehanna International Group. Samsung is expected to supply the other 80% and could supply more should LG Display’s production capabilities fall short.”
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MacDailyNews Take: Hopefully, LG Display see some real success so Apple can cut their dependence onthe slavish copier Samsung and diversifiy suppliers thereby increasing competition and driving down prices/maintaining strong margins.
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