Apple is having a tough time trying to diversify iPhone screen suppliers and break away from Samsung.
LG Display was lined up to become a second supplier of OLED displays for this year’s iPhone lineup, but after running into manufacturing troubles, it may not be able to meet Apple’s demands.
Apple has been working to reduce its dependence on Samsung for years, and it has been successful in its efforts to source other components elsewhere. However, it still relies on its South Korean rival for some parts that other manufacturers simply can’t produce fast enough.
Samsung is currently the sole supplier of OLED displays for iPhone X, but Apple had hoped that it could add another manfacturer to its supply chain ahead of this year’s refresh. Some reports claimed LG would could provide all the displays for the rumored iPhone X Plus.
Now that looks unlikely.
LG can’t keep up with Apple’s demands
“Manufacturing problems have caused LG to fall behind the schedule that many suppliers follow before beginning mass production for iPhones,” reports The Wall Street Journal, citing several sources familiar with the matter.
“As a result, opinions within Apple are divided on whether LG Display can become a second source of OLED displays for the upcoming iPhones.”
Should Apple decide to drop a potential deal with LG, it would be forced to rely on Samsung as its sole supplier for another year. Not only would this put more cash in its rival’s bank, but it would give the company less bargaining power over pricing.
Samsung has the power
Samsung would be well aware that Apple can’t shop elsewhere. OLED displays like those used in iPhone X are notoriously difficult to manufacture, and other display makers would have difficultly meeting Apple’s demands — and its strict quality controls.
Adding a second supplier would have allowed Apple to demand reduced prices from Samsung. This may have enabled it to offer its next-generation iPhone lineup at slightly cheaper prices. The OLED display in iPhone X is currently its most expensive component by far.
“LG Display was recently ordered by Apple to go through a third round of prototype production for the OLED smartphone screens, an extra step that most suppliers don’t go through for many components,” adds WSJ.
It seems Apple is certainly fighting to make a deal with LG happen, but with time running out, it may have to wait until next year.