August 23, 2016 12:15 am JST

High-end iPhone to have Samsung-like curved OLED display in 2017: source

DEBBY WU and CHENG TING-FANG, Nikkei staff writers

With iPhone sales falling flat, Apple is set to follow Samsung's lead with a more curved design.

TAIPEI -- Apple Inc. has come up with three new iPhone models for next year, including a premium handset that will sport a curved display like the one Samsung Electronics has adopted for its top-of-the-range smartphones, a source familiar with Apple's plans told the Nikkei Asian Review.

"There will be a 4.7-inch model, another that will be 5.5-inches and a premium handset that will be either 5.5-inches or larger equipped with a screen bent on the two sides," the source said, adding the first two will continue to have flat screens, like current Apple mobile devices.

Apple's planned iPhone overhaul next year shows the growing pressure the No. 2 smartphone brand by shipments faces from the Android camp, spearheaded by Samsung, in a saturated market.

David Hsieh, a senior director at market reserach specialist IHS DisplaySearch, said that while the premium handset will adopt advanced organic light-emitting diode panels, the other two models will stick with low-temperature poly-silicon panels. Compared with LTPS screens, OLEDs offer sharper color contrast. And while LTPS panels are rigid, OLED displays are flexible and allow manufacturers to create curved and even foldable screens.

Competitor and partner

Samsung Electronics is the only company at the moment that offers the flexible OLED screens. The South Korean conglomerate was the global leader in smartphone shipments last year and in the first quarter of 2016 and the only smartphone maker that offers curved OLED displays. It introduced curved displays with the Galaxy Note Edge and Galaxy 6 Edge last year. Its latest product lineup includes two premium handsets, the Galaxy 7 Edge and Note 7, with curved screens

Hsieh said that Samsung Electronics will be Apple's sole OLED supplier next year but that the Suwon-based company will not be able to fully meet demand for both itself and its U.S. customer next year.

Meanwhile, Jeff Pu, an analyst at Taipei-based Yuanta Investment Consulting, said Apple is likely to give up metal casings for iPhones and shift to a new look -- a front glass cover and chassis, joined by a metal bezel for all its handsets next year.

The Nikkei Asian Review reported earlier in August that Hon Hai Precision Industry, also known as Foxconn Technology Group, has been developing glass casing technology since last year in the hope of winning orders from Apple orders for the new chassis in 2017.

Foxconn, a key iPhone assembler, is a major supplier of metal casings for iPhones. It dominates orders for 5.5-inch iPhones and the lower priced iPhone SE. It splits the market for 4.7-inch iPhones with Catcher Technology of Taiwan and U.S.-based Jabil.

Foxconn's large production capacity means it will be able to provide Apple with enough glass chassis for all its new handsets next year, should the Taiwanese manufacturer win orders for the new casings.

Since the beginning of 2016, Apple has been grappling with falling demand for its premium iPhone 6s and iPhone 6s Plus handsets around the world. Its sales dropped, year on year, for the first time in 13 years in the January-March period and the downtrend continued in April-June. The average selling price for iPhones fell in the quarter ended in June, suggesting stronger demand for the lower-priced iPhone SE. Sales in greater China plummeted 33%.

By contrast, Samsung Electronics saw sales growth in the first half, thanks to the popularity of its premium handsets with curved screens. China's Huawei Technologies, the world's third-largest smartphone brand, also saw its business grow in the January-June period

Apple is bracing for another significant drop in sales of its new iPhone 7 range to be unveiled in September.

A major supplier has received component orders for 54 million units for the two new models, the iPhone 7 and iPhone 7 Plus, according to the source familiar with the iPhone design, and the lack of demand is likely to drag down shipments for the full year to less than 200 million handsets, compared with the 231 million phones Apple sold last year.

Both Yuanta's Pu and Arthur Liao, an analyst at Fubon Securities, expect full-year iPhone shipments to be around 208 million units.

Faced with mounting challenges from Android rivals, Apple killed off plans for a premium iPhone 7 model in the second quarter, less than six months before its planneed launch in September, the Nikkei Asian Review reported earlier in August.

The scrapped model was to be a 5.5-inch handset equipped with a dual lens camera. The move leaves Apple with only two models.

The 4.7-inch iPhone 7 will have a single lens camera, while the 5.5-inch iPhone 7 Plus will have a dual lens camera, according to a person familiar with the matter.

Apple did not respond to an emailed request seeking comments. 

Asia300

Samsung Electronics Co., Ltd.

South Korea

Market(Ticker): KRX(005930)
Sector:
Industry:
Electronic Technology
Telecommunications Equipment
Market cap(USD): 289,120.77M
Shares: 161.19M
Asia300

Hon Hai Precision Industry Co., Ltd.

Taiwan

Market(Ticker): TAI(2317)
Sector:
Industry:
Electronic Technology
Computer Peripherals
Market cap(USD): 51,508.63M
Shares: 17,328.73M

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