Apple is preparing its supply chain for the onslaught of next-generation iPhone sales in the fall, expected to be a bumper year with much anticipation for the radical ‘iPhone 8’ redesign. According to ETNews, via Digitimes, Apple has agreed a two year contract with Samsung Display to supply curved iPhone OLED panels.
Samsung is apparently upping capacity to as much as 92 million units in 2017, as demand from Apple rises. Apple uses OLED in Apple Watch and the MacBook Pro Touch Bar already, but the iPhone 8 represents the first time the company will use the display technology in the iPhone, it’s biggest product.
Earlier in the week, Nikkei reported that Apple had agreed a deal for 70 million OLED panels this year. However, Apple is demanding even higher quantities from Samsung as it expects its next-generation device to be a blockbuster success.
Analysts expect Apple to sell around ~60 million iPhones this year featuring an OLED display, which is an impressive figure given the iPhone 8 is not expected to launch until September (at the earliest). Apple typically sells more than ten million new iPhones in the opening weekend alone.
Apple reportedly has signed a two-year contract with Samsung Display for the supply of KRW10 trillion (US$9 billion) worth of small-size curved OLED panels, according to Korea-based ET News, Chosun Bizand other media.
Based on the contract, Samsung Display will ship 70-92 million small-size OLED panels to Apple in 2017, said the reports. This means that about 30% of iPhone devices shipped in 2017 will come with curved OLED panels, given that Apple currently ships about 200 million iPhone devices a year.
The contract that has been signed is set for two years which secures supplies for the new 2017 iPhone and the 2018 iPhone refresh. Depending on production scale, Apple could also bring on more suppliers in addition to Samsung in the future. At least for 2017, Samsung and Apple are saturating OLED supplies, pushing out other manufacturers.
Although we are yet to see case or schematics leaks, the iPhone 8 is hotly-anticipated. Rumors suggest it will feature a 5.8-inch gently-curved edge-to-edge OLED display, a bezel-less front, a 3D depth-sensing front camera, wireless charging, a virtual Home Button with integrated Touch ID fingerprint sensor, facial recognition and more.
Investors are calling the next iPhone a ‘supercycle’, anticipating a major sales jump after three years of the same exterior design. In addition to the redesigned phone, Apple is also expected to debut two iterative updates to the existing iPhone 7 and iPhone 7 Plus. These latter devices will focus on internal component upgrades. The hype for the radical iPhone 8 is what is driving the consumer (and investor) frenzy, though.
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