Apple for years has worked to diversify its supply chain, wisely electing to spread its orders across multiple suppliers. As you’ve likely heard, it’s never a great idea to have all of your eggs in a single basket.
Such is the predicament Apple now finds itself in with regard to OLED screen production. With its current flagship, Apple turned to Samsung for its OLED screen technology but with the next wave of iPhones due out later this year, Apple is hoping to bring on a second screen supplier – LG Display.
According to a recent report from The Wall Street Journal, Apple has subjected LG Display to a third round of prototyping which most suppliers don’t have to go through (perhaps due to concerns that LG Display’s OLED screen quality isn’t comparable to what Samsung is turning out). This could push back plans to enter mass production in July as it seems insiders are divided on their opinion of whether or not LG Display will be able to manufacture the screens in time.
As The Journal puts it, LG Display has nailed TV-sized OLED panels but has yet to perfect production of smaller, smartphone-sized screens.
Apple’s desire to diversify its supply chain will help the company minimize risk (especially when your primary supplier is also your top competitor) and put it in a position to better negotiate on component pricing.
Apple is expected to launch as many as three distinct iPhone models this year including one with an OLED screen approaching 6.5-inches diagonally.