If Apple decides to join Samsung in releasing a phone with a curved screen, as has been reported, the move would illustrate a curious fact about the two rivals: In some ways, the two companies’ businesses are entwined.
Apple’s 2017 product line may include a 5.5-inch — or larger — phone with a “screen bent on the two sides” like Samsung’s top-end phones, a source told Nikkei Asian Review. Though the change is yet unconfirmed by Apple, it would introduce a “me too feature” that competitor Samsung already has.
“Samsung and Apple are already in a strange relationship — they are like friend-enemy,” said Jennifer Colegrove, CEO of Touch Display Research. “Samsung knows Apple’s power. They have so many friends around the world, and they can leverage Apple’s brand and popularity.”
For this new feature, if it does indeed emerge, Apple would likely need Samsung’s expertise to provide the niche technology behind curved smartphone screens, experts say. But Samsung, in turn, is in need of new buyers to profit from the expensive manufacturing, they said.
Why Apple needs Samsung
Samsung’s Galaxy Note 7, released this month, is the latest phone to have the curved display. With features like an iris scanner, many critics have dubbed it a worthy iPhone opponent and demand has surged. It comes after the curved-screen Galaxy S7 edge was the world’s best-selling Android smartphone during the first half of this year, Researcher Strategy Analytics told Reuters.
The proven appeal of the sleek, seamless bevel could be just what Apple needs to set it apart from the many iPhone copycats, said John Vinh, senior research analyst at Pacific Crest.
“If you look at the overall smartphone market, it’s pretty clear that it’s become a very mature market,” Vinh said. “There’s not been a lot of great anticipation of the iPhone 7 ramp. Most people think that it’s going to be pretty marginal innovation. If you’re Apple and your looking for some sort of key differentiation, it’s one of the only noticeable technologies.”
So why would Apple — known for its focus on design — lag Samsung? The two companies weren’t immediately available for more comment.
One reason: To make the curved screen Apple would need a reliable supply of “small, flexible panels of active matrix organic light emitting diodes” (OLED), and Samsung is the only major producer of this technology.
While LG could be a potential supplier, Samsung has exclusive technologies and the largest production capacity, which has helped it dominate this market since 2010, said Jerry Kang, IHS Markit display analyst.
In fact, Samsung recently had trouble meeting the demand it its own products. The launch of the Samsung S6 Edge suffered delays due to supply constraint on the screens. And some have already complained that the Note 7’s screens are prone to breaking.
Supply constraints are likely to exist even into 2017, said Vinh. Colegrove believes the investment on OLED capacity expansion is only just materializing.
And Apple, its defenders have pointed out, likes to release products that are perfected, even if they’re not first. Colegrove said that based on reviews of Apple patent applications, the company might design a more sharply-tilted edge that’s easy to pick up from a flat surface, for instance.
“They would design something more interesting,” she said.
Why Samsung needs Apple
Samsung has bet billions on OLEDs, backing the technology even when it looked like it was about to be replaced by liquid crystal display (LCD) makers, in a VHS-versus-Betamax-style war, analysts said. Samsung stuck with the technology because the growth of smartphone demand could help them to recover the expenses, said Kang.
While Samsung’s Galaxy series has helped the OLED business, the growth of smartphone market has slowed from a few years ago, so Samsung needed to find additional demand, Kang said.
“If you’re Samsung, and you can get the industry to start switching, and you have a commanding head start, that suggests it will be a very profitable venture for years to come,” Vinh said.
Samsung will probably be the only OLED supplier for Apple’s iPhone till 2017, Kang said, which may give Apple a chance to switch providers as laggards catch up. But Samsung has supplied many other components to Apple over the years, he said.
In the mean time, the curved screens could benefit consumers, due to their thinness, light weight, potentially lower power, durability and slightly better color and brightness, on average. Plus, they open the door to new form factors, like a scroll-like device, wearables, or a hybrid phone/tablet.
Still, those possibilities remain far away, leaving Apple and Samsung tied together for now.
“If Samsung were to launch a foldable smartphone in 2017, we believe Apple would likely not follow suit until 2019 at the earliest,” wrote Gene Munster, senior research analyst at Piper Jaffray.
Either way, the rivalry may not be able to shake the status quo, Munster.
“It’s not about each incremental feature or device,” Munster said. “At the end of the day people have learned to use Apple’s iOS operating system … there’s always a feature, or two, or three that Samsung outdoes the iPhone on. But people stay with the iPhone.”