Apple in talks with Sharp to supply OLED screens for new iPhones

TOKYO: Apple is in negotiations with Sharp to secure organic LED displays for the iPhone maker’s next-generation of devices, a person familiar with the matter said.

Any organic light-emitting diode ( OLED) supply agreement would depend on the Osaka-based company’s output capacity, said the person, who asked not to be identified because talks aren’t public. The discussions stem from Apple’s desire to increase the number of suppliers for OLED screens, according to the person.

Earlier on Friday, Sharp announced it will invest 57.4 billion yen ($566 million) for the development of OLED production facilities, with the goal of starting output by June 2018. The funds will be used for equipment in Sharp’s factories in Mie and Osaka, and to deliver sample products to customers, the company said in a statement.

“Apple has unofficially or as a nod encouraged Sharp to go into it,” said Amir Anvarzadeh, Singapore-based head of Japanese equity sales at BGC Partners, in a phone interview. “Apple’s general strategy is to increase the competition on the supply side, and dilute the risk exposure to one company.”

Sharp spokesman Toyodo Uemura declined to comment on specific customers.

An Apple spokesperson in Japan didn’t immediately respond to a request for comment.

Sharp’s capital investment in OLED is part of 200 billion yen that the manufacturer had already committed to OLED technology, part of a strategic plan it adopted with new owner Foxconn Technology Group. Next-generation screens based on OLED, or organic light-emitting diode, technology promise more vivid images and less battery drain.