AH Tech Talk: Sharp-Foxconn Deal Trouble For Samsung

You may be familiar with Sharp Electronics as the company whose name is on your calculator, your TV or even your oven. They're also a somewhat minor player in the Android space, releasing some defiantly different mid-rangers such as the Sharp Aquos Crystal from back in 2013. Their presence in some of these spaces is only possible because they're a major manufacturer of screens. Specifically, they're a large player in the LCD panel market. Although they recently pulled out of the TV market in the United States, licensing their sets for sale by Hisense, they're still doing fairly well in some key markets. After a failed buyout by iPhone manufacturing contractor Foxconn back in February, the deal has been amended and finalized. Foxconn is set to use Sharp as a catalyst to get themselves into the growing OLED panel market. With the OLED space currently dominated by Samsung, Apple wanting to move to OLED for the iPhone 7 and Foxconn being the contract manufacturer for the iPhone, it doesn't take any insider knowledge to see the writing on the wall.

Samsung currently rules the OLED roost, claiming an absolutely ridiculous 95 percent share of the market. A huge share of that is in the mobile world, especially with their own Samsung Galaxy devices. Currently, Samsung manufactures the processors for iDevices, while the screens are supplied by LG Display and Japan Display. If Apple's reported plans to use an AMOLED display on the next iteration of their globally acclaimed smartphone are the real deal, it stands to reason that they'd tap space leader and bosom buddy Samsung for the part. If that doesn't happen, though - if Foxconn ends up manufacturing the screens and leaving Samsung out in the cold - it spells a market share loss in OLED for Samsung, perhaps a fairly major one.

Although the iPhone isn't a part of the OLED market yet, it's an incredibly popular device. With Apple's newest flagship, the iPhone 6S, breaking 13 million sales in its first week, it's not hard to see how a switch to AMOLED panels for the new model could massively increase the size of the market and spell a huge payday for the contract holder. The panel in the iPhone 6, for example, is estimated to have cost Apple about $45 a pop. Obviously, they're going to step their game up for the iPhone 7 and, in all likelihood, it will smash sales records. A quick glance at a calculator will tell you that somebody is set to score just over half a billion dollars, on the low end of the estimate. There are rumors that Apple may get into OLED manufacture themselves, but there's nothing concrete out there at the moment.

The OLED market isn't gigantic by any means, so the iPhone jumping on board would mean a market share expansion of epic proportions, likely upwards of five percent, and a serious hit right in the numbers for anybody who doesn't hold that contract. While that number may not sound very big, it's not only a much larger figure than it seems, but it could be the figure that sets a precedent. Although mobile and TV displays these days are beginning to push toward OLED screens, LCD is still in wide use. If a popular player like Apple jumps on the OLED bandwagon, it may well take more than a few players with it, further increasing the size of the market. These players may or may not belong to Samsung, but if Apple

These players may or may not belong to Samsung, but if Apple is the one who influenced their decision to switch to OLED, it's not unlikely that they'll want the manufacturer that started the wave to handle their product. This could mean that Samsung's loss goes from ego, being a few points of market share percentage, to an actual monetary loss as more and more people getting into the OLED space, and perhaps even some of Samsung's current customers, go with Foxconn or perhaps even Apple, if they choose to get into the space. With court cases over patents, stiff competition between their flagship mobile phones and even marketing campaigns aimed squarely at one another, things are tense enough between Apple and Samsung as it is. If this deal goes through and Apple jilts Samsung on the iPhone 7 display deal, they could end up losing them as a processor manufacturer, which would separate the two companies in every way and spell the end of them playing nice with one another for the sake of business. If the current storm is them playing nice, just what may happen if this deal leaves a bad taste in Samsung's mouth?

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About the Author
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Daniel Fuller

Senior Staff Writer
Daniel has been writing for Android Headlines since 2015, and is one of the site's Senior Staff Writers. He's been living the Android life since 2010, and has been interested in technology of all sorts since childhood. His personal, educational and professional backgrounds in computer science, gaming, literature, and music leave him uniquely equipped to handle a wide range of news topics for the site. These include the likes of machine learning, voice assistants, AI technology development, and hot gaming news in the Android world. Contact him at [email protected]
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