OLED consumption could grow three-fold thanks to Apple

Apple is considering switching to OLED displays, and between iPhones and TV produced by others, OLED consumption is expected to jump.

Rumors have been swirling that Apple plans on using OLED displays in the iPhone by 2018, and the reports are being taken seriously. The move has been expected for a while, and an analyst who spoke at the October 2014 Global Sources Mobile Electronics Fair predicted that Apple would make the switch in the iPhone 7 or 8. Should Apple finally take the plunge, OLED display consumption could increase 2.5 to 3 times, according to a report from Shinhan Investment Corp. Until recently, the most prominent maker of phones with OLED displays has been Samsung, putting the technology in its Galaxy S and Galaxy Note lines. These devices amounted to about 60 million to 80 million units, according to the report, which means Apple entering the market would provide a big boost to OLED consumption. When Apple released the iPhone 6s and 6s Plus in September, the company sold13 million units in three days.

Yet, smartphones are not even expected to be the biggest driver of OLED consumption. That honor belongs to TVs. Right now, “LG Electronics is the only company betting on OLED TV," according to Shinhan Investment. However, Samsung is expected to join the race in 2018, when the market should reach 4.5 to 5 million units. Samsung's entrance will be significant, because it is already the dominant player in OLED production for small- and medium-sized displays being the only company capable of mass producing them.

Sourcing from China in this market will be tricky. Most displays in OLED TVs and smartphones are not likely to be coming from China companies. One of the things driving this shift is the fact that China firms do not have an edge in this market. They already have parity in the 32in LCD TV space and the advantage for Korea in the 55in market is expected to disappear over the course of 2016. China manufacturers' production of OLED panels is currently "insignificant," according to the report. EverDisplay Optronics and Visionox have a capacity of 25,000 4G sheets and 4,000 5.5G sheets per month, respectively. China's largest panel supplier, BOE Technology, is expected to ramp up OLED production in 2016, reaching a capacity of 24,000 5.5G sheets and 20,000 6G sheets a month by 2017. The shift to OLED displays will attract entrants into the market, but it may take a while before China TV and smartphone manufacturers are able to take full advantage of displays produced at home.