Apple Inc. (NASDAQ:AAPL) Depends Heavily on Rival Samsung Electronics for the Supply of IPhone 8 Parts

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Apple Inc. (NASDAQ:AAPL) and Samsung Electronics are considered the biggest rival in the handset market but it turns out Apple is heavily dependent on the Korean giant to supply parts for the iPhone 8.

The iPhone 8 is one of the most anticipated devices this year and the biggest aspect that is expected to change is the screen. Apple is expected to use OLED screen technology for the new handset but there Samsung happens to be the supplier of those OLED displays. This is interesting considering that the two companies have been competing to take the crown for the best smartphone for the past few years.

“OLED iPhone panel supply is controlled wholly by Samsung, not Apple,” stated KGI Securities analyst, Ming-Chi Kuo in an Apple Insight note.

Kuo further pointed out that Samsung has a higher bargaining power. He claims that the OLED panel module might cost anywhere between $120 and $130 per unit which is higher than the iPhone’s LCD module which is priced between $45 and $55 per unit. The analyst also added that this is probably one of the reasons why Apple is desperately in need of a second provider of the OLED panels.

Kuo’s stated that a slow supply of Samsung’s OLED displays could lead to significant impact on the iPhone 8 production line thus affecting the availability of the handset. This highlights already existing rumors that the upcoming iPhone 8 might initially be plagued by low supply. The KGI analyst also believes that Samsung will most likely continue to supply parts even for next year’s iPhone.

Samsung has already been setting the pace as far as screen design is concerned with the launch of the Samsung Galaxy S8 earlier this year. The device featured a bigger screen real estate. Apple is expected to follow the same trend with its upcoming handset in order to keep up with the competition as well as the promised redesign of the handset.

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