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Samsung's OLED Display Monopoly May Explain iPhone 8's Rumored $1,000 Price

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Samsung is one of the only companies able to reliably mass produce OLED displays suitable for Apple's smartphone needs, giving Samsung a monopoly over OLED panel display and allowing the South Korean company to charge high prices.

In a new research note shared with investors this morning, KGI Securities analyst Ming-Chi Kuo says OLED iPhone panel supply is "controlled wholly by Samsung," with Samsung likely charging Apple $120 to $130 per OLED panel module, which is approximately $75 more than the 5.5-inch LCD module price of $45 to $55 for "Plus" sized iPhones.


The high price Apple is currently shelling out for OLED displays explain in part why we're hearing rumors suggesting pricing on the upcoming OLED-equipped "iPhone 8" could start at somewhere right around $1,000 for the entry-level model. Along with an OLED panel, it also uses 3D sensor camera components for facial recognition and many other advanced components that could also add a premium to the price.

OLED displays being provided by a single manufacturer may also explains some of the rumors we've heard about manufacturing difficulties and supply constraints. We're still expecting the new OLED iPhone to be available in limited quantities for several months after its launch.

Kuo says Apple urgently needs to find another company that can supply OLED displays, and Apple is making an effort to do so. Apple is said to be investing billions in LG's OLED smartphone production with the goal of eventually securing 45,000 panels per month for future iPhones starting in 2019.

Apple is also rumored to have purchased OLED display production machinery from a company in Taiwan to research OLED technology in order to cut down on its reliance on Samsung, and there have been rumors pointing towards a partnership with Japan Display.

Until Apple is able to diversify its OLED supply chain, it will be difficult for the company to secure enough inventory at a reasonable enough price to build a full iPhone lineup with OLED panels, which is its ultimate goal for 2018 or 2019. This year, Apple will introduce one OLED iPhone and two iPhones that use standard LCD panels.

Article Link: Samsung's OLED Display Monopoly May Explain iPhone 8's Rumored $1,000 Price
 

lolkthxbai

macrumors 65816
May 7, 2011
1,366
418
They had so many years to diversify their OLED display supply. I mean, it was a no brainer that they were heading towards OLED from LCD and they still did nothing until recently? Android handset manufacturers have been using OLED/AMOLED displays for many years now. Shame on you Apple.
 
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Z400Racer37

macrumors 6502a
Feb 7, 2011
705
1,655
Theres a difference between a legislated monopoly, and one that's created by a company ability to create a product more efficiently. If this pricing is true, Samsung is being really stupid, and as Apple's investment in LG will indicate, they will not hold that 'monopoly' for very long. Markets always demolish companies who try to operate with outsized gross profit margins, and if what this article says is true, that'll happen here too.
 
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alms

macrumors member
Oct 16, 2003
63
22
Boston
45,000 panels a month is less than 6 million per year. That's a small fraction of what Apple will need. Hard to see how that would help get them out from under Samsung's thumb.
 
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Relentless Power

macrumors Nehalem
Jul 12, 2016
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45,000 panels a month is less than 6 million per year. That's a small fraction of what Apple will need. Hard to see how that would help get them out from under Samsung's thumb.

Apple has a contract with Samsung for 92 Million OLED panels.

https://www.macrumors.com/2017/04/06/apple-deal-samsung-oled-iphone-panels/amp/

When the contract ends with Samsung, Apple is reportedly shifting towards LG to manufacture OLED panels from that point forward.

https://www.macrumors.com/2017/07/28/apple-investing-billions-in-lg-for-oleds-report/amp/
 
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WatchTheThrone

macrumors regular
Aug 2, 2011
239
137
A monopoly only because everyone still wants to produce the cheaper LCD tech while some companies sucked it up and spent the money on R&D and now they get to reap the rewards. OLED is the future though so get with it other display companies.
 
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killr_b

macrumors 6502a
Oct 21, 2005
870
403
Suckerfornia
I thought there was just this one Japanese company that made the machines that make OLED panels and they are supplying Samsung because Samsung had the foresight to buy their max capacity...? Apple slept too long and now it's the Apple customers who will pay for that miscalculation.
 
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Kabeyun

macrumors 68030
Mar 27, 2004
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Eastern USA
OLED iPhone panel supply is “controlled wholly by Samsung,” with Samsung likely charging Apple $120 to $130 per OLED panel module, which is approximately $75 more than the 5.5-inch LCD module price of $45 to $55 for “Plus” sized iPhones.
So Samsung's monopoly "explains" seventy-five whole dollars of that rumored $1000 price? Color me unimpressed. Pretty clickbaity.


Edit: Actually, an OLED screen would be more expensive than an LCD screen anyway. So any monopolistic pricing effect would be less than $75. Even less impressed.
 
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jsalda

macrumors regular
Jun 6, 2008
189
313
I could see something like this pricing.


iphone 7s $600
iphone 7s plus $700
iphone 7 OLED $800
ipone 7 OLED Plus $900
Not a bad structure, although I think it may be overall low. Apple can't put too much gap between the OLED and non-OLED versions as most customers will get sticker shock and just go with the non-OLED.
 
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DougFNJ

macrumors 65816
Jan 22, 2008
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I thought there was just this one Japanese company that made the machines that make OLED panels and they are supplying Samsung because Samsung had the foresight to buy their max capacity...? Apple slept too long and now it's the Apple customers who will pay for that miscalculation.

Only if you want the best version
 
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Michaelgtrusa

macrumors 604
Oct 13, 2008
7,900
1,821
Will the go after Samsung the way they are going after Qualcomm?

Samsung cannot make this claim, OLED diode technology was invented by researchers at the Eastman Kodak company in 1987. Chemists, Ching W Tang and Steven Van Slyke were the principal inventors.
 
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democracyrules

Suspended
Nov 18, 2016
997
608
Is that you Tim? Trying to blame the high price on a supplier, lol.
It is a business justification. Apple just follows a very wise business model. When components of a product have higher costs, a manufacturer needs to increase the product price to cover the direct and indirect product costs and profit target. Apple is not a charity organization or basic need product manufacturer and Apple needs to make as much profit as they could for their shareholders. Apple is a "premium" or "luxury" product maker whose products are bought based on "want" not "needed to live" therefore, premium price is expected and not intended for just anybody to purchase it. I totally agree with Apple pricing decision. Apple products are not for entitlement for all people but for people who can afford or have excellent disposable income. It is a fact. Not greedy. It is business not charity.
 
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xmonkey

macrumors 6502a
Jun 30, 2016
670
912
CA
Will the go after Samsung the way they are going after Qualcomm?

Samsung cannot make this claim, OLED diode technology was invented by researchers at the Eastman Kodak company in 1987. Chemists, Ching W Tang and Steven Van Slyke were the principal inventors.
It's my understanding that although Kodak did invent the first OLEDs, the technology and methods they used to do it are very different from how Samsung and LG make them today so there's not really an overlap.
 
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now i see it

macrumors 603
Jan 2, 2002
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BvizioN

macrumors 603
Mar 16, 2012
5,192
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Manchester, UK
Is that you Tim? Trying to blame the high price on a supplier, lol.

Of course not. Apple get these supplies for bargain prices. I mean, who would want to charge "poor" company like Apple high prices? Especially competitors like Samsung? Hell no........
 
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