Apple Inc. (NASDAQ:AAPL) To Face Major Hurdles From Shrinking OLED Supply

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Samsung is expected to ship total 100 million units of OLED displays in 2016

Apple Inc. (NASDAQ:AAPL) is expected to completely transition to OLED for the iPhone schedule to release in 2017. At present, the company incorporates OLED displays in its smartwatch, called Apple Watch. While Samsung could be described as Apple’s biggest rival with the two having embroiled in a dirty set of legal battles, the South Korean behemoth is also one of the iPhone maker’s most reliable supplier in terms of flash and DRAM.

With Apple goes towards OLED display, it is expected that Samsung would act as the iPhone maker’s primary supplier in that regard as well. It seems that Apple’s plans for OLED functionality may be hindered with shortages in the supply chain. According to an earlier report published on Digitimes, Samsung will only be able to produce 100 million units by the end of this year. According to estimates, Samsung would only manufacture 150 million units for third parties every year by 2019. Around the same time, Apple is expected to have fully shifted to OLED displays for its flagship iPhone. On an interesting note, Samsung is expected to keep 290 million OLED displays for its own devices. A tight supply of OLED displays is already causing Google to incorporate a different type of screen for Nexus S in certain geographical areas.

There are several OLED manufacturers aside from Samsung. Applied Materials, for instance, announced earlier this year that its orders increased by four times in May. CEO of Applied Materials, Gary Dickerson, noted that this implies ‘sustainable’ growth, further suggesting that Apple was the primary reason for it. At the same time, it should be noted that Samsung is far ahead of all others in OLED screens in terms of volume. In 2010, the company was reported to hold 98% of the OLED smartphone screen segment. As such, Samsung OLED supply decline could have major implications on the entire smartphone market.

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