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Here's Why an OLED iPhone Will Be So Expensive

An OLED iPhone could be more than $1,000; while this might seem excessive, it's really just basic supply and demand.

July 31, 2017
iPhone 7 / 7 Plus

In the last few weeks, I've fielded numerous calls about rumors that an OLED iPhone will cost well over $1,000. While this might seem excessive, it's really just basic supply and demand. It seems that media types inquiring about this subject either did not take economics in school or are just not seeing the big picture.

Opinions We have known for some time that OLED displays are in high demand and short supply. That means that OLED displays, if Apple can get them, will initially be quite costly. Suppliers I have talked to in Asia say the actual cost of a 5.7-inch OLED panel today is somewhere between $230 and $280, depending on quantity and availability.

I saw my first OLED almost 20 years ago while a display factory in Osaka, Japan. It was a very early prototype, but even then, manufacturers knew they would have yield problems and high costs for many years. At first, only one or two out of 10 were even usable.

At CES 2017, much of the industry got a good look at the incredible quality and resolution that OLED technology provides. Many TV vendors showed off early models of large-screen OLED TVs, some priced over $10,000. One key thing about OLED displays is that the blacks are blacker and the whites are whiter and every pixel is illuminated so color depth and concentration is amazing. But when I talked these vendors, they told me not to expect OLED TVs in any large quantities yet; the problems facing the industry 20 years ago are still present today.

This is why an OLED iPhone would be so pricey, though I'm sure the Apple faithful will clamor to get one. The company's move to OLED will start a stampede from other smartphone vendors, at least at the high end, exacerbating the supply issue.

But Apple's move to OLED will have one key positive effect almost immediately. The various makers of OLED displays will be incentivized to invest more aggressively in their manufacturing lines as demand for small OLED displays increases. The pending Foxconn-Sharp display factory could focus on making OLED displays too when it comes online later this decade.

I am convinced that Apple has every intention to move all its iPhone models to OLED over the next two to three years. But thanks to basic economic principles, any OLED smartphone introduced today will be very expensive until supply increases bring prices down to more normal levels.

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About Tim Bajarin

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Tim Bajarin

Tim Bajarin is recognized as one of the leading industry consultants, analysts, and futurists covering the field of personal computers and consumer technology. Mr. Bajarin has been with Creative Strategies since 1981 and has provided research to most of the leading hardware and software vendors in the industry including IBM, Apple, Xerox, Compaq, Dell, AT&T, Microsoft, Polaroid, Lotus, Epson, Toshiba, and numerous others. Mr. Bajarin is known as a concise, futuristic analyst, credited with predicting the desktop publishing revolution three years before it hit the market, and identifying multimedia as a major trend in written reports as early as 1984. He has authored major industry studies on PC, portable computing, pen-based computing, desktop publishing, multimedia computing, mobile devices, and IOT. He serves on conference advisory boards and is a frequent featured speaker at computer conferences worldwide.

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