Apple May Use China-Made OLED Display On 2020's iPhones To Reduce Cost

The OLED screen made by Samsung is one of the most expensive components on any iPhone. With an aim to cut costs, Apple is reportedly certifying Chinese substitutes to use on its smartphones releasing next year.

This move is expected to give Apple more freedom in changing the price of its high-end models to gain a competitive edge on the market.

As stated by Nikkei Asian Review, Apple’s decision to make use of OLED screens made by BOE Technology Group can bring it the benefit of the Chinese government subsidies, thus helping it with starting the OLED production to rival that of South Korean companies. Samsung is currently holding 90% of the market of the premium screen, with LG Display falls far behind.

Some recently-released reports said that it was highly likely that Apple will opt for OLED screens for three of its iPhone models to be launched next year. These phones might be 5G-compatible successors of the 2019’s models, ‘iPhone 11’ and ‘iPhone 11 Pro,’ similar to last year’s iPhone XS and XS Max. If leaks from Apple’s supply chain is to be believed, the smallest device will have a display measuring 5.42 inches, while the two higher-end models will have the screen size of 6.06 inches and 6.67 inches.

The Samsung-made OLED display on iPhone XS and XS Max is estimated to be worth $110 and $120 (roughly Rs. 7,892 and Rs. 8,609) respectively. These two phones are priced at $999 and $1,099 in the U.S, Rs. 1,11,900 and 1,09,900 in India.

The high price of the screens come down to the short of competition and the cost of production, which is twice as much as that of LCDs. However, this will change soon enough as BOE’s OLED screens can be 20% cheaper than their South Korean counterpart, and with smaller dimensions, the price can get even more budget-friendly, courtesy of the Chinese government’s subsidies.

The main reason for Apple’s decision to turn to Chinese screen production is the difference in quality. Early in the lifespan of iPhone XS and XS Max, it is believed that Apple preferred Samsung-made OLED display because of the imparity in color reproduction with screens made by LG.

The year 2019 has seen Apple releases iPhones with ‘pro’ display capable of higher brightness, superior color rendition, and faster refresh rates. If this projection holds true, the company will widen the gap between its premium and lower-end devices. This plan will explain why Apple looks for another OLED provider for its 2020 smartphones.

BOE has already been Apple’s supplier of LCD screen used on iPad and MacBook. So far, Apple has shown no intention of switching to OLED for these two devices because of the concerns over cost.

The latest reports suggest that if BOE passes certifications, the Chinese company may begin supplying parts for the older generations of iPhones before coming to newer devices next year.

BOE is also providing Huawei with flexible screens for its Mate X, and Apple is also testing the same product for its future devices.

Even if Apple can achieve a lower cost for its components, users may not necessarily see an accordingly reduction in retail price. Apple will reportedly give 2020’s iPhone lineup Qualcomm 5G modems, meaning the cost of other components will likely increase as a result.

It is possible that Apple may use what it saves from the screen to offer higher-end chips and more capable battery, making no difference in price for next year's iPhones.