Not iPhone 11, It’s Apple iPhone 12 Samsung Must Be More Worried About!

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While the world has set its eyes on iPhone 11, which is expected to get launched on September 20, Apple has got some other plans to surprise its arch-rival Samsung with iPhone 12.

Apple Inc. (NASDAQ:AAPL) is set to reduce its reliance on Samsung regarding the supply of OLED screens for its iPhones in the future. Reports from Nikkei suggest that Apple might hand over the contract of OLED screens to the Chinese display company BOE Technology Group. Apparently, the OLED screens from the company are involved in ‘aggressive testing phase’, and are expected to be ready for the iPhone 12, to be released in 2020.

Not only will this deal allow Apple to cut down on costs for its OLED screens, but it will also help reduce the reliance of the company on a direct competitor in Samsung.

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But why is it significant at this point in time? Let us look at it in a little more detail.

The Expected Boom in the OLED Industry

According to IDTechEx Research, the OLED market is expected to experience a boom this year. From last year’s $25.5 billion, the market is expected to jump to a number over $30 billion this year. Since the OLED is the most expensive component of an iPhone – accounting for nearly 30% of the total cost of the iPhone Xs Max – cutting down on costs is going to majorly help in increasing profit margins and managing the pricing of these devices.

Thus, making a deal like this for Apple just before the expected boom can be really lucrative. With reports suggesting that Apple might have at least two smartphones with OLED screens in its 2020 iPhone lineup, such a deal starts to make a lot more sense.

Moreover, this is not the first time that BOE Technology Group will be providing screens for Apple devices. BOE has been providing LCD panels to Apple for its Macbook and iPad devices since 2017. It is one of the companies which benefited majorly from the favourable government policies and subsidies for its display market. BOE also provides screens for major companies like the Lenovo group, HP and Dell.

What Does It Mean for Samsung?

BOE Technology Group represents a major threat to Samsung in the global display market. This can be appropriately highlighted in the global smartphone display market statistics in Q1 2019. Therefore, Samsung stood in a dominant position at first, having a market share of 40.2 per cent. BOE Technology Group came third, with 11.9 per cent. But what jumps out here is their position now with respect to their position last year. Samsung’s market share decreased by 6.6 percentage points from Q1 2018. But on the other hand, BOE Technology nearly doubled its market share in the same period of time. A large contributor of this was their increased investment in flexible OLED panels, the same ones that Apple doesn’t want to buy from Samsung anymore.

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Hence, Samsung is facing a major threat of being usurped in the premium display industry by its Chinese counterparts in the years to come. The end of the partnership with Apple is not only going to cost the company a lot of money, but it might also even mean Apple reducing prices of its future iPhones, making them a tougher competition.

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