Sharp to begin production of OLED panels next year, potentially benefiting Apple

Sharp will begin shipping OLED panels next year in a move that may give Apple (NASDAQ: AAPL) a third potential supplier of displays for the iPhone.

Nikkei reported that Foxconn Chairman Terry Gou said Sharp "will be ready before 2018" to ship OLED panels to its customers. Foxconn acquired Sharp in March for $3.5 billion in a move that appeared to hinge on Sharp's display-production business. While Foxconn is a crucial iPhone supplier, it doesn't offer displays, which are far and away the costliest single component in the iPhone.

The news, which was picked up on in the U.S. by 9to5Mac, follows reports earlier this week that Samsung is ramping up production of OLED displays by more than 50 percent to meet demand from Apple and other smartphone vendors. The South Korean electronics giant will spend nearly $7 billion to churn out more next-generation displays after Apple "apparently approached the company" to provide them for a new iPhone, Nikkei reported.

Gou didn't say whether Apple is among the Sharp customers requesting OLED panels.

Apple was widely expected to move from LCD to OLED in the next few years, but Nikkei reported in March that the company was ahead of schedule and was in talks with both LG and Samsung in a deal estimated to be worth $12 billion. Apple is expected to introduce a new flagship handset this fall, but OLED-equipped iPhones aren't expected to hit the market until next year.

Ditching LCD in favor of OLED could provide several benefits for Apple. The technology could be used to make thinner, more flexible displays with curves rather than straight lines with right angles. OLED also requires less power than LCD, boosting battery life, and it supports more vivid colors.

Having a third OLED display provider to choose in addition to LG and Samsung from could give Apple substantial leverage, potentially driving down its production costs. That could result in lower retail prices, which might enable Apple to snatch back some of its share of an extremely competitive smartphone market.

For more:
- see this Nikkei report
- read this 9to5Mac story

Related articles:
Report: Samsung to boost OLED production to meet Apple's demand
Report: Apple's iPhone may sport OLED display next year
Foxconn finally agrees to buy Sharp for $3.5B
Foxconn's $6.2B acquisition of Sharp could be a win for Apple, but deal stumbles over Sharp's liabilities

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