AUO to Make 4-inch iPhone 7 Displays, Sapphire Screens Ruled Out by LEDinside

Taiwanese display manufacturer AUO has become Apple’s smartphone screen supplier for the upcoming iPhone 7c, reported UDN.

According to market rumors, AUO has signed a contract with Apple to ship 4-inch smartphone displays for iPhone 7c by first quarter of 2016. This will be the first time a Taiwanese display manufacturer is sharing iPhone orders with Japanese and Korean manufacturers.

AUO has declined to comment.

This is AUO’s first iPhone order. The company has transformed its L3A and 3B factories into Low Temperature Poly-silicon (LTPS) factories to manufacture iPhone 7C displays to be shipped by first quarter of 2016.

According to sources, Apple is facing severe iPhone smartphone display supply shortages and is seeking for alternative suppliers. AUO had previously been an Apple iPad mini display supplier. By turning to AUO, Apple could ease is iPhone supply shortage issue.

Japan Display Inc. (JDI) and LG Display (LGD) have been main iPhone display suppliers followed by Sharp. JDI and LGD have been suppliers of the 5.5-inch iPhone 6 Plus, while Sharp has been supplying 4.7-inch iPhone 6 screens.

Japanese manufacturers JDI and Sharp have been traditional iPhone 4-inch display suppliers, but JDI production capacity has been strained from supplying 5.5-inch displays for the iPhone 6 Plus. Apple has been dissatisfied with Sharp’s low yield rates caused by its aged manufacturing equipment, and its production capacity is probably will be affected by the company’s ongoing financial crisis. All these factors have driven Apple to find other suppliers.

Industry insiders projected iPhone 7c will not be released on the market till one to two years later, since the release dates of iPhone 6S, 6S Plus and iPhone 7 have not been announced. The C series have always been the more affordable iPhone model, and considering how iPhone 5c sales were lower than expected, it quickly fell out of the mainstream. Hence, further observations are required for the iPhone 7c.

AUO’s acquisition of iPhone 7c panel orders reveals the industry recognizes the company’s high-end smartphone display technology, which will also assist the company’s acquisition of high end iPhone models.

The launch of low range 4-inch smartphones would is logical for Apple in its product lineup, since it has positioned the 5.5-inch and 4.7-inch phones respectively as high-end and mid-range phones, said Calvin Hsieh, Principle Analyst, DisplaySearch, IHS. By launching a 4-inch smartphone, Apple will be able to compete with Samsung from low range to high-end phones.

However, a MacWorld report noted Apple might be dropping C and S models altogether in the future. So there might be a revival of 4-inch smartphones in the upcoming iPhone 7.

Key points from MacWorld report:

  1. A 4-inch iPhone on the horizon. Apple believed to be launching two model smartphones in September 2015. If Apple releases a 4-inch screened phone for the next generation phone, it might be named iPhone 7 Mini.
  2. Apple dropping iPhone C and S naming system in near future, as negative reputation is attached to these products. Apple will skip 6S phones altogether.
  3. Dual LED flash system to stay. Apple will be releasing more advanced 3D camera sensor modules in next generation phones and has filed related patents.
  4. Sapphire screen might make its way to future generation phones. Corning is working on harder glass, which it has coined “Project Phire” to compete with sapphire screens.
  5. Foxconn might become Apple’s sapphire supplier and has been investing in related equipment.
  6. Apple is vying to incorporate Touch ID functions into the phone screen instead of keeping the conventional Home Button design. The Home Button might be transformed into a popup joystick for gaming.

Despite floating market rumors that sapphire screens will be featured in the upcoming iPhone 7, LEDinside analysts pointed it is highly improbable. “Sapphire screens in the upcoming iPhone 7 are very unlikely,” said Roger Chu, Research Director of LEDinside. “Sapphire screened phones will probably be appearing in phones after iPhone 7, since the sapphire supply chain is not ready to meet Apple demands yet.” 

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