Apple ordered 60 million OLED display panels from Samsung Display, South Korean media reported on Monday. Samsung Group’s subsidiary will reportedly provide Apple with 5.5-inch OLED panels for the upcoming iPhone 8 and Apple reportedly agreed to pay approximately $4.3 billion for those products. Apple already ordered 100 million OLED panels for the iPhone 8 from Samsung in mid-2016, so it’s unclear whether this latest deal was already planned back then or not. The iPhone 8 is said to be the first iPhone sporting an OLED display, and seeing how Samsung Display is currently dominating the market for small OLED panels, the Cupertino-based tech giant has little choice but to turn to Samsung to fulfill its ambitions. Neither Samsung nor Apple have yet confirmed this deal, but more information on their collaboration will likely follow in the coming months seeing how the iPhone 8 is expected to hit the market this fall, presumably in September.
Apple sells approximately 200 million iPhones on an annual basis, but it remains to be seen whether Samsung will now be supplying OLED panels for nearly 80 percent of the company’s production volume. Namely, the upcoming iPhone 8 is rumored to ship in three variants, and only the most expensive one is believed to feature a 5.5-inch OLED display while the other two will still be equipped with standard LCD panels. Apple is allegedly looking to transition to OLED displays in a gradual manner, meaning the company may not fully adopt these panels in all of its models prior to 2019. On the other hand, the South Korean tech giant is already using OLED displays in a majority of its models and has recently been committing additional resources to expanding its manufacturing operations.
The fact that both Samsung and Apple will utilize Samsung Display’s OLED panels in their 2017 flagships could cause a component shortage in the industry, market watchers believe. Samsung Display currently holds over 95 percent of the market for small OLED displays used in smartphones and while LG Display is also capable of producing significant volumes of OLED panels, Samsung’s domestic rival is still mostly focused on manufacturing displays for smartwatches instead of smartphones. However, LG Display is now reportedly expanding its manufacturing operations with the goal of catering to Apple, recent reports indicate.