Apple Shifts Strategic Partnership from Samsung to LG With $2.7b OLED Panels Order

As 2019 swiftly approaches, tech giant Apple Inc. is securing strategic plans for the future of its flagship smartphones. Paving the way for the anticipated transition, Apple has reportedly invested an advance payment of $2.7 billion with South Korean display manufacturer, LG for the production of OLED panels destined for iPhone models of the future.

Reports suggest that Apple’s considerable investment will secure a monthly production of 45,000 units of LG’s sixth-generation OLED panels to be featured in upcoming versions of iPhones. Samsung has held the spot as Apple’s sole and exclusive supplier for OLED panels, however, it’s clear Apple is in the process of diversifying its supply chain.

The move to LG, Apple’s longtime partner for LCD panels, has led to rumors suggesting LG may become a significant competitor against Samsung in the OLED market. While the deal came as a surprise to many, particularly to Samsung, the Galaxy S8 producer, the iPhone creator will continue to use Samsung’s panels for the soon-to-be-launched iPhone 8.

Scheduled for a September 2017 release, the iPhone 8 is the marquee product for Apple’s 10th-anniversary celebration. Expected to be called either iPhone 8 or iPhone X, the new handset will undoubtedly mark a milestone in the brand’s history.

This renewed partnership with LG has sown benefits for both companies. Not only has Apple secured a secondary supplier for its in-demand OLED panels, but LG also manages to reduce risks associated with the substantial initial expenses related to expanding its OLED production.

Notably, LG has showcased both reliability and industry savvy in developing high-quality OLED panels. Besides Apple, Google has also recognized LG’s potential, investing a hefty $900 million for OLED production for its inaugural OLED smartphone.

Given Apple’s sizeable advance payment, predictions are floating around suggesting a likely shift in Apple’s smartphone display technology to OLED by 2019. Despite having a strategic relationship with Samsung, which dominates approximately 95% of the mobile OLED panels market, Apple made the surprising move to strike a deal with LG.

While the motivations and subsequent impact for the industry behind Apple’s decision remain uncertain at this time, one thing is for sure – Apple’s strategic moves are worth watching closely. As we wait to unveil the complete plans, we can only speculate and anticipate what 2019 has in store for Apple and its millions of users worldwide.