Samsung will charge Apple between $120 to $130 for every OLED panel it ships, according to analyst Ming-Chi Kuo of KGI Securities. Its ability to offer a stable supply of high-quality displays, something that other display manufacturers cannot offer, puts Samsung in a position to dictate the prices of the components it produces. However, it seems that Apple is not happy with this setup, and it is currently looking for other companies to act as a second source for OLED panels. Sourcing from multiple manufacturers results in reduced component prices, while it also lowers the risk of manufacturing delays due to supplier problems. However, the products produced by other manufacturers, which include LG Display and Japan Display, have yet to pass the stringent quality control standards set by the Cupertino-based tech firm.
The South Korean tech giant has seen massive increases in revenue and profits, partly due to its success in the smartphone display market. It is currently the leading smartphone panel maker in the world, cornering more than one-fourth of the entire market. Samsung’s success in developing and making OLED screens have propelled the company to the top spot, with many smartphone companies willing to purchase much more expensive panels for their premium handsets. Recent reports show that flexible OLED displays cost around $65 a piece, and standard OLED panels are priced at $36, while tech firms pay an average of $18 per LCD panel. Even for Apple, the switch to AMOLED translates to a big jump in production expenses, as the LCD panels they use for their current flagship device, the iPhone 7 Plus, costs around $50 each. Despite the high prices, many manufacturers are choosing OLED over LCD due to its higher refresh rate, lower input lag, wider color gamut, and increased power efficiency.
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However, Samsung’s ability to command prices may not last long, as other manufacturers are quickly catching up in terms of panel quality and production capacity. LG Display, the third-largest display manufacturer in the world, will supply OLED panels to Apple soon, with reports claiming that shipments may begin as soon as 2018. In an effort to fulfill projected demands, the company invested more than $3.5 billion to expand its production of smartphone displays. Another manufacturer looking to supply Apple with its own products is Japan Display, although there is no available timeline yet on when the company will start shipping its OLED displays.