Apple Inc. (AAPL) is developing its own next-generation device displays, people familiar with the situation told Bloomberg, the latest in a series of moves by the iPhone maker to bring in-house some key components currently supplied by third-parties.
According to Bloomberg’s sources, the Cupertino, California-based technology giant is producing limited quantities of MicroLED screens "for testing purposes" at a secret facility located close to its main headquarters.
MicroLED is viewed as a significant upgrade on the current OLED displays, offering the potential to make gadgets slimmer, brighter and less power-hungry. However, these technological advancements are also believed to be much more difficult to manufacturer, making it a costly endeavor and one that Apple was almost forced to abandon about 12 months ago.
After some initial teething problems, the company’s engineers are now believed to be at an advanced stage of production. However, the sources said that the technology is unlikely to make its way onto the iPhone for at least three to five years, adding that the first benefactor is likely to be the Apple Watch. (See also: Smartwatch Sales to Hit $29B by 2022—Thank Apple.)
News that Apple is building its own displays sent the share prices of several of the company’s Asian suppliers -- including Japan Display, LG Display, maker of the Apple Watch screen, Samsung Electronics Co. Ltd. (SSNLF), which produces OLED panels for the iPhone X, and Sharp Corp. -- down in Monday morning trading. Bloomberg reported that U.S.-based companies, Synaptics Inc. (SYNA) and Universal Display Corp. (OLED), might also fall victim to Apple’s latest venture.
For Apple, the advantages of bringing MicroLED screens to market are plentiful. The technology could potentially give the company an important edge over smartphone competitors, including its biggest rival Samsung, which currently is able to offer customers superior displays.
Ray Soneira, founder and CEO of screen tester DisplayMate Technologies, told Bloomberg that designing screens in-house represents a “golden opportunity” for Apple. “Everyone can buy an OLED or LCD screen,” he said. “But Apple could own MicroLED.” (See also: Apple Wants to Buy Cobalt Directly From Miners: Report.)
However, Apple still has a long way to go before fulfilling its ambitions to control the next cutting-edge display technology. Mass producing the complex screens is likely to be a challenging and costly endeavor. And should the company overcome manufacturing hurdles, there’s always the risk that enough time will have passed for a rival technology to surpass it.