Japan Display Inc will start supplying Apple later this year with organic light-emitting diode (OLED) screens for the Apple Watch, two sources told Reuters, a major step forward by the cash deficient company whose late move to shift toward OLED has cost orders from Apple.
Japan Display’s core business of liquid crystal display (LCD) is facing downtrend largely because of the Apple’s recent strategy of shifting away from LCD and lower sales of its iPhone XR which was the only LCD model by Apple in 2018.
Samsung Display, a unit of Samsung Electronics, and LG Display are the dominating players in OLED display market but they are also facing higher competitions by Chinese rivals who are getting close quickly.
OLED displays for having thinner size and relatively more flexibility than LCD screens, are generally out classing the LCDs.
Currently, OLED panels for iPhones have been provide by Samsung Display as an exclusive supplier while most of the panels for Apple Watch have been supplied by LG Display.
To supply OLED to Apple is a positive sign for Japan Display but there is a tough road ahead for the company, said Hiroshi Hayase, senior director at IHS Markit.
Winning orders for iPhones would be tougher for Japan Display as Samsung Display has acquired much of an experience, technology and production capacity in a time span of over more than a decade doing the business and to compete with such rival and make the both ends meets by the Japan Display is a big question, Hayase said.
More than half of Japan Display’s revenue comes from Apple and currently Japan Display at a plant in eastern Japan, where it manufactures smartphone screens, has a pilot line for making OLED.
Japan Display is seeking to generate as much as $990 million by going through a fresh financing.