AAPL Apple Inc

By Takashi Mochizuki 

TOKYO-- Apple Inc. has decided to adopt a flexible display for one model of the new iPhone coming out this year and has ordered sufficient components to enable mass production, people familiar with the matter said.

Apple had been studying flexible organic light-emitting diode or OLED screens similar to those used by rival Samsung Electronics Co. and had asked suppliers for prototypes, The Wall Street Journal reported in November.

People with direct knowledge of Apple's production plans said the Cupertino, Calif., company has decided to go ahead with the technology, which allows manufacturers to bend screens in ways they couldn't previously, and it will release a phone model using the OLED screens this year.

An Apple spokeswoman declined to comment.

Using OLED displays would allow Apple to introduce a phone with a new look to fuel sales. Apple's last major design overhaul came with the iPhone 6, a slimmer phone with larger displays that helped reignite sales growth and propel the company to record profits.

The iPhone 7, introduced in September 2016, came with a similar design to its predecessor, contributing to slower sales in China. Analysts say Chinese consumers feel more motivated to buy a new phone when it has a different look that gives it appeal as a status symbol.

Apple typically updates its iPhone lineup once a year, and this year's update will come 10 years after the first iPhone hit the market in 2007.

The anticipation of an anniversary iPhone with OLED technology helped send Apple's share price to record highs in February. The phone is expected to be priced at about $1,000, bringing the average selling price of an iPhone in Apple's next fiscal year to $684 from $666, according to BMO Capital Markets.

So far, all iPhones have used liquid-crystal displays, long the standard for mobile devices and televisions. People familiar with Apple's plans said its release this year would include two models with the traditional LCDs and a third one with the OLED screen.

They said Apple would introduce other updates including a USB-C port for the power cord and other peripheral devices instead of the company's original Lightning connector. The models would also do away with a physical home button, they said. Those updates would give the iPhone features already available on other smartphones.

In 2014, Samsung introduced its first phones with angled OLED screens. Initially Samsung is set to supply the OLED screens to Apple, despite their rivalry in the consumer market, because Samsung is the only component maker capable today of making sufficient quantities, the people familiar with the plans said. A Samsung representative declined to comment.

Samsung is set to introduce its own updates in March to its Galaxy smartphones, and those models will all have curved screens, a person familiar with the matter has said. Samsung and Apple have been running neck-and-neck recently for the No. 1 spot in global smartphone shipments.

LG Display Co. and Japan Display Inc., major makers of LCD screens, are working on OLED mass-production lines but aren't ready to supply Apple yet, said people familiar with Apple's plans. An LG Display representative declined to comment. A Japan Display spokesman said the company expects to be ready for OLED mass production by 2018.

Apple and Samsung are struggling to develop features that would motivate consumers to replace their handsets frequently and distinguish higher-end brands from affordable Chinese-made handsets.

Hiroki Totoki, who is responsible for Sony Corp.'s smartphone business, said in a recent interview that it is getting difficult for companies to differentiate their new products, not just from the competition but also from their own past models.

However, Mr. Totoki questioned whether OLED screens were the answer, at least for now, saying current versions consume more energy and cost more than the standard LCDs. Sony's latest smartphones use LCDs to ensure the highest display quality, Mr. Totoki said.

Tripp Mickle and Eun-Young Jeong contributed to this article.

Write to Takashi Mochizuki at takashi.mochizuki@wsj.com

(END) Dow Jones Newswires

February 28, 2017 00:58 ET (05:58 GMT)

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