A Potential Threat to Samsung Display and LG Display
China's BOE has reportedly received conditional approval for the supply of its OLED displays for Apple's new smartphone iPhone 13. The Chinese display maker has long failed to satisfy finicky Apple but now has grabbed a golden opportunity. Analysts say that it may pose a threat to Samsung Display and LG Display, which have virtually monopolized OLED supply to Apple.
BOE’s displays will be loaded into Apple’s new smartphone only when they meet 100 percent of Apple's requirements. BOE, China's largest display company, has sought to supply its OLED displays to Apple since 2017. However, it has been rejected by Apple for the poor performance of its products and yield problems.
Last year, it received conditional approval for refurbished iPhone 12 products and supplied a very small amount of OLEDs for the iPhone 12 basic model. For this reason, industry insiders believe that BOE is likely to supply OLED displays for iPhone 13 even though the amount may not be large. BOE is producing OLED displays for Apple at its production line in Chengdu, Sichuan Province.
It is meaningful for BOE to supply OLED panels to Apple because it means the beginning of an end to Korean company’s 100 percent monopoly on the Apple-bound OLED display market.
According to market research firm Omdia and Chinese IT media outlet GIZ China, the amount of Apple's OLED panel use in 2021 stand at 172 million units. Of these, 160 million (61.6 percent) are expected to go into in the iPhone 13. Samsung Display will supply 77 million OLEDs (73 percent) and LG Display 29 million (27 percent). However, if BOE succeeds in supplying a very small of its OLED displays for the iPhone 13, there is a possibility that BOE will receive more orders from Apple in the future.
"From the standpoint of China, it can be a symbolic event for BOE to officially supply OLED displays to Apple," an industry official said. "Apple also needs to help BOE grow to increase price bargaining power with Samsung and LG."
Meanwhile, the proportion of OLEDs among all smartphones is expected to increase from 23 percent in 2017 to 47 percent next year, Counterpoint Research says. As of the first quarter of 2021, Samsung Display ranked first with a 73.2 percent market share and LG Display second with 14.3 percent. The two Korean display giants maintained wide gaps with Chinese companies such as BOE with 7.3 percent and China Star with 2.4 percent.
However, Chinese companies are picking up their paces in expanding their OLED display market shares. China's OLED market share for smartphones increased from about five percent in 2018 to 12.6 percent in the first quarter of 2021. "China's market share may rise to 27 percent next year," Omdia predicted.