Shortage of OLED screen supplies
Apple (AAPL) may suffer a setback in its efforts to produce a significantly redesigned iPhone. This redesign would mark the tenth anniversary of its smartphone line in 2017 and could jump-start its sales.
Speculation has been widespread that Apple is planning to outfit the 2018 iPhone with an OLED display, which is more vibrant and efficient than the LCD screens the company uses today. However, Apple may not be able to secure enough OLED screens for the new iPhone.
Holding off the shift to OLED
A shortage of OLED screen supplies could force Apple (AAPL) to delay the shift to OLEDs in the 2018 iPhone. Because Apple is expected to roll out a pair of new iPhones in 2017, perhaps the alternative would be for the company to fit only one model of the new iPhones with OLED screens and keep LCD screens in the other.
However, this pair of screen options could hurt the sales of the product, considering that Apple is just catching up in OLED displays for smartphones. Samsung already offers Galaxy phones with OLED screens.
Apple is under pressure to ship the next iPhone with significant feature upgrades as the company struggles to boost iPhone sales, which have sagged in recent quarters. Alphabet (GOOGL), Sony (SNE), and homegrown Chinese manufacturers have stepped up the competition in the premium smartphone market.
Apple shipped 45.5 million iPhones in the September 2016 quarter, down from 48 million in the same quarter in 2015.
Apple has typically used display feature upgrades to drive iPhone sales. The Retina Display, first added to the iPhone 4 in 2010, lifted sales of the device. In 2012, the display size-increase feature added to the iPhone 5 also boosted sales. Moving to larger displays in the iPhone 6 and iPhone 6S in 2014 also increased the devices’ sales.