China's photoelectric display equipment manufacturer BOE is expected to become Apple's first Chinese display supplier. According to Bloomberg, citing people familiar with the matter, Apple is considering using the OLED display supplied by BOE on the next-generation iPhone from 2018. Apple is currently testing BOE's display devices. First Financial contacted the relevant person in charge of Apple and BOE, and declined to comment on the news.
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    Bloomberg quoted people familiar with the matter as saying that Apple has been testing BOE's AMOLED (active matrix OLED) screen for several months, but has not yet announced whether to add BOE to the supplier list. BOE is currently one of the largest display equipment manufacturers in China and the largest LCD screen manufacturer in the world by market value. The company has spent RMB 100 billion to establish two AMOLED production plants in Chengdu, Sichuan and Mianyang, in case of future unexpected needs.
    The source also said that because the negotiations are still in the early stages, it is unlikely that the iPhone display to be released this year will use BOE's OLED screen, but it may use the company's products in models launched in 2018 or later.
    BOE shares closed up 1.25% today, performing better than the broader market.
    At present, the only OLED screen supplier disclosed by Apple to the outside world is Samsung. If BOE becomes an Apple supplier, it will become the first future supplier other than Samsung's foreseeable future. Apple has always kept its suppliers confidential.
    OLED screen is becoming a major development trend of smart phones. Apple is tapping new partners to cope with the possible shortage of OLED supply in the future. OLED displays are brighter and more power efficient. Apple competitors Samsung and Huawei have launched OLED smartphones. Samsung's upcoming Galaxy S8 model will be exposed to adopt a full-screen borderless design to obtain a higher screen ratio, equipped with a whole OLED curved glass screen on the front.
    The display screen is the most expensive part of all parts of the smartphone. The production process of OLED screens is more complicated, and it is especially difficult to achieve mass production. At present, Apple is still waiting for suppliers to mass-produce technology to improve. Currently, the top four smartphone display suppliers in the world include Samsung, Sharp, LG and Japan Display. But even the combined production capacity of these four major manufacturers cannot meet the demand of all iPhones this year. Therefore, Apple will only be able to satisfy one high-end version of the iPhone flagship model using OLED screens this year, and will delay the launch of other versions of OLED screens until 2018.
    Yan Zhanmeng, research director of Counterpoint Research, a research institute, told the First Financial Reporter: "Apple is forced to choose multiple suppliers to meet OLED demand, which is a huge opportunity for BOE. But this is not enough to shake Samsung's dominant position. Because currently only Samsung has continuous and stable production capacity."
    Yan Zhanmeng also said: "BOE is China's top two display manufacturers, the advantage is that it already has 2k resolution display products, and the quality of high ppi (pixel) products is also stable and large, and it is now seeking Promote the production of larger 2K and OLED screens."
    IHS analyst Zhang Bing told the First Financial Reporter: “BOE’s 2k screen is still only a prototype product, and it is difficult to mass produce. And what Apple needs is a high ppi display that can reach the level of a retina screen, such as a 5-inch screen. Large screens will require a resolution of 2k. Smaller screens may not need to reach 2k." According to Zhang Bing, the minimum standard ppi for the retina is 326.
    Among BOE's current two production lines, the Chengdu production line has invested 46.5 billion yuan to produce flexible AMOLED screens. Another production line in Mianyang is expected to be officially put into production two years later. BOE currently has only one OLED production base in Inner Mongolia.
    If BOE's two production lines are all started, the annual output can reach 1.6 million square meters of flexible AMOLED glass display. This is slightly higher than the total global OLED production expected by IHS in 2016.
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    Each time Apple releases flagship models, it will adopt new hardware and software technologies. Research institute Stifel predicts that in addition to the OLED screen, Apple’s 10th anniversary flagship model to be released in September this year will also be integrated into the iPhone’s 3D sensing technology.
    In 2017, Apple and Samsung signed an exclusive OLED supply agreement. According to the "Korea Herald" on February 14th, citing inside sources, Samsung has recently signed a large order for Apple's OLED screen worth $4.35 billion with Apple. If you add 100 million OLED orders in April last year, Apple will purchase more than 160 million OLED display components from Samsung. This also means that Samsung has already assumed the supply of about 80% of the future iPhone output.
    At the same time, the news also said that in order to meet Apple's demand, Samsung will also set up a brand new OLED production plant to meet growing orders, and Samsung currently has three OLED production plants in South Korea.
    But this does not mean that Samsung can meet all of Apple's needs. From the Apple's perspective, "putting all the eggs in one basket" is not a wise move, especially Samsung must first meet the needs of its new OLED mobile phone. Analysis predicts that Apple’s iPhone sales will reach 90 million in the last quarter of this year.
    OLED technology will become the focus of major mobile phones competing for the market this year. Bloomberg once quoted insiders as saying that Samsung will launch two new smartphones with OLED screens this year, one of which is a smartphone with a screen that can be folded like a cosmetic case, and the other is a "two-in-one" smartphone. A smartphone with a 5-inch screen can be plugged into an 8-inch panel and become a tablet. The person familiar with the matter also revealed that the two bendable smartphones will be released at the MWC Barcelona World Mobile Conference at the end of this month. Samsung declined to comment.
    Canalys Asia Pacific Research Director Peng Luping told the First Financial Reporter: "If Samsung can promote new models of OLED technology to users earlier than Apple, it will help it seize the market opportunities and recapture some users from Apple. The sales have been declining in the past two years."
    In addition to large mobile phone manufacturers, Moxi Technology, a small and unknown company in Chongqing, China, also announced during the MWC in Shanghai last year that it will release a bendable smart phone shaped like a bracelet and showed a black and white display that will be mass-produced. version. However, the first financial reporter interviewed Yu Chongsheng, head of the Moxi Technology Application Center last week, he said: "Current mass production is still limited to small-scale, I hope to achieve mass production in the second half of this year."
    Suwon, another South Korean company, also released a promotional video of a foldable smartphone concept last year, but mass production has not yet been achieved. However, the technology of these small companies can also be regarded as a challenge to Samsung and Apple, which means that the competition for flexible screen technology has risen to a new level.
    In the context of the increasingly saturated global smartphone market, the introduction of new technologies by various manufacturers helps to gain new growth momentum. IDC data shows that in the whole year of 2016, the global smartphone market shipped a total of 1.47 billion units. Although it reached a record high, it only increased by 2.3% compared with 1.44 billion units in 2015, and the growth rate is slowing.