Apple Inc. might tap a Chinese company to supply displays for iPhones, a move that could snatch a huge business opportunity that has long been enjoyed by Samsung Electronics Co.
The Cupertino, California-based tech giant is in talks with BOE Technology Group Co. to supply screens for future iPhones, Bloomberg reported, citing sources familiar with the matter.
Apple has been testing the Chinese company's active-matrix organic light-emitting diode (AMOLED) screens for several months, Bloomberg said. It is still undecided whether or not Apple would hire BOE as one of its suppliers.
It was reported that the screen maker has already splurged nearly 100 billion yuan on two AMOLED plants in China in preparation for more business opportunities. One of BOE's AMOLED plants in Chengdu can produce about 48,000 glass substrates, while the second plant in Mianyang is poised to start production in the next two years.
The company, however, is looking at the 2018 iteration of Apple's famed handset and not this year's much-anticipated September release.
Once granted with the deal, BOE is poised to become Apple's first supplier of next-generation screens outside South Korea and Japan. BOE is one of the largest screen manufacturers in China, and is the world's top producer of LCD panels by market value.
"It's an opportunity for BOE as Apple is known to seek multiple suppliers for one component," James Yan, research director for Counterpoint Research in Beijing, told Bloomberg. "But it's unlikely to challenge Samsung because it is able to roll out high-quality screens at a steady capacity."
With limited supply of OLED screens, Apple is scrambling to find a supplier as it tries to compete with Huawei Technologies and Samsung for sharper and more powerful displays.
Speculations have surrounded the upcoming iPhone 8, with some industry watchers saying that the model will finally have an OLED screen. According to MacRumors, Apple ordered 60 million OLED panels from Samsung for the iPhone 8 on top of the 100 million units previously placed by the handset maker last year.