Analysts Skeptical Of Latest iPhone OLED Rumor, Apple Display Supplier Shares Sink

A report made the rounds yesterday that claims Apple has decided to use only OLED screens for its iPhone models that will launch next year. That original report drove shares in some of the major iPhone suppliers down. A move by Apple to all OLED would mean a significant reduction in sales for suppliers like Japan Display Inc. and Sharp Corp. Shares of the former declined as much as 21% and the latter declined 4.3%.

Neither of those suppliers has been able to build OLED screens in mass quantities yet, however, many analysts doubt that this OLED transition will happen. Apple moved 216 million iPhones in 2017, and getting that many OLED screens from current suppliers is unlikely. Most analysts don't see the transition to all OLED screens happening by next year.

One issue with the OLEDs that are available right now is one of cost, and Apple has reportedly been pressuring Samsung to reduce the costs of the OLED screens. Apple is reportedly planning to launch a 6.1-inch iPhone this year that uses an LCD with pricing as low as $550.

"It is unlikely that Apple will be releasing three OLED models next year," said Yuanta Securities Investment Consulting analyst Jeff Pu.

One of the major problems is that the existing OLED suppliers of Samsung Display Co. and LG Display Co aren’t producing OLEDs in massive numbers. LG is struggling to move to mass production and isn't expected to be able to produce more than the 5-10 million units for Apple in 2019 than it will produce for the company in 2018. The news was enough to push LG Display shares up 5.9% in trading, Samsung Display shares dropped 1.5%.

Some analysts say that moving to all OLED screens could push iPhones out of reach for mass-market consumers.