Filing suggests Apple investing big in OLED supply, increasing capital expenditure

An investment firm has delved deeply into Apple's most recent Securities and Exchange Commission 10-K filing, and sees purchase orders extending over one year in duration which suggests to them that Apple is in the middle of a big OLED buy from Samsung — the main supplier of the technology.

J.P. Morgan has noted that Apple has placed a purchase order with more than a year duration for the first time, and totals around $4 billion. It coincides with an "off-balance sheet obligation" for the same amount from the third quarter, which the analysts believe is related to long-term OLED sourcing from Samsung for a potential future iPhone.

The order may be related to a change that Apple made in its risk related to component acquisition statement, adding that in addition to needing mass quantities of parts, it may have trouble acquiring troublesome components "on commercially reasonable terms." OLED technology is finicky to produce, with even minor impurities causing the loss of an entire batch of screens, and rising costs for purchasers.

Samsung may not be the only source of the technology. Earlier this year, the Sharp CEO made remarks that Apple was shifting to the technology away from LTPS, and iPhone screen supplier Japan Display was seeking loans to shift to OLED production.

Rumors have pegged an OLED iPhone to a high-end model in 2017, the 2018 release, or possibly wait until 2019.

Apple currently uses OLED screens in the Apple Watch, and for the Touch Bar in the new MacBook Pro.

In other tidbits gleaned from the 10-K filing by J.P. Morgan, Apple's employee count at the end of the fiscal year was over 116,000 employees, up 6,000 year-over-year. Fiscal year 2015 saw an increase in headcount of about 17,500 people.

Apple is also slated to spend $16 billion in capital expenditure, up from a previous estimate of $13 billion.

4 Comments

maestro64 5029 comments · 19 Years

About 8 years ago

It must mean that OLED is ready for prime time, Apple is gearing up for mass production. They must have figure out how to address the various downs sided to using OLED display.

ericthehalfbee 4489 comments · 13 Years

maestro64 said:

It must mean that OLED is ready for prime time, Apple is gearing up for mass production. They must have figure out how to address the various downs sided to use and OLED display.

Exactly. So sick of people claiming for the last 5 years that Apple should be using OLED while being blind to just how crappy early displays were and how the technology has progressed by leaps and bounds over the years. It's obvious Apple would eventually switch to OLED (or some other technology) once it was good enough to meet Apples strict requirements.

canukstorm 2740 comments · 11 Years

ericthehalfbee said:

maestro64 said:

It must mean that OLED is ready for prime time, Apple is gearing up for mass production. They must have figure out how to address the various downs sided to use and OLED display.

Exactly. So sick of people claiming for the last 5 years that Apple should be using OLED while being blind to just how crappy early displays were and how the technology has progressed by leaps and bounds over the years. It's obvious Apple would eventually switch to OLED (or some other technology) once it was good enough to meet Apples strict requirements.

Very true but given Apple's large investments in micro-LED, Apple seems to be pouring a lot of money into a technology that it might be temporarily using.

leavingthebigg 1291 comments · 11 Years

canukstorm said:

ericthehalfbee said:

maestro64 said:

It must mean that OLED is ready for prime time, Apple is gearing up for mass production. They must have figure out how to address the various downs sided to use and OLED display.

Exactly. So sick of people claiming for the last 5 years that Apple should be using OLED while being blind to just how crappy early displays were and how the technology has progressed by leaps and bounds over the years. It's obvious Apple would eventually switch to OLED (or some other technology) once it was good enough to meet Apples strict requirements.

Very true but given Apple's large investments in micro-LED, Apple seems to be pouring a lot of money into a technology that it might be temporarily using.

Just because analysts are thinking OLED does not mean Apple is thinking OLED. It is within the realm of possibility that Apple is ready to move full steam ahead with Micro-OLED and is buying the manufacturing equipment for suppliers to make it happen. This type of purchase prevents suppliers from using the equipment to build products for Apple's competitors for an exclusive arc of time. Apple has done this before.