LG's OLED Production Woes Are Bad News For Apple

Last year's iPhone X was the first OLED phone Apple ever released, and rumors claim that this year, the company is looking to release two more iPhones with OLED displays. Obviously, this second device means that Apple is going to need a lot more OLED panels, and as such, it's been looking to diversify its screen suppliers. Thus far, Apple has only relied on Samsung for its OLED panels, but for 2018, it's also been trying to bring LG Display on as well.

Successfully tapping LG Display as an OLED manufacturer for 2018's iPhone lineup accomplishes two things. First, it would allow Apple to scale production to meet the demands of manufacturing OLED panels for two iPhones instead of just one. Second, and perhaps most importantly from the point of view of Apple executives, is that diversifying its OLED suppliers means that Apple could potentially negotiate a better deal with Samsung when it comes to production costs.

It seems that plan to expand its manufacturing pool might not be working out as well as Apple hoped. A new report from The Wall Street Journal claims that LG Display is having problem meeting production benchmarks for smartphone OLED panels, and it may not have the process perfected by the time mass production starts on 2018's iPhone lineup. The Wall Street Journal spoke to "people familiar with the matter," who claim that some within Apple are wondering if LG will be ready in time.

At first glance, this might seem like a strange report, as LG Display is the biggest TV OLED manufacturer in the world. However, the process of creating OLED displays for TVs is one that's been around for a while, whereas producing OLED panels for smaller devices like smartphones is a process that many manufacturers – including LG, it seems – have yet to perfect.

Assuming this is true, then LG Display doesn't have very long to nail production down. iPhone mass production typically begins in July, and at that point, Apple is going to have to decide whether or not to move forward with Samsung as its sole supplier. Should it make that decision, it puts Apple in an undesirable bargaining position for the second year in a row, as Samsung can charge higher prices knowing its the only company capable of meeting Apple's demands. Here's hoping LG can get things sorted out, but if this report is accurate, then things aren't looking all that good.