Apple struggles to break free from Samsung display reliance

Samsung

Apple's relationship with Samsung has always been contentious, and even now, the two frequently butt heads over iPhone display technology.

For many years, Apple has been developing microLED display technology for the Apple Watch and other products. But Apple engineers are finding that the display technology is more challenging than they expected, according to a report on Monday from The Information.

Samsung has been protective of its manufacturing technologies. According to multiple former Apple employees, Samsung has barred Apple engineers from entering its factories.

In a 2017 incident, Apple engineers flew to South Korea to meet with Samsung's display division employees. But they couldn't enter Samsung's facilities, including office buildings, because the company wanted to protect its intellectual property covering OLED display technology.

On another occasion, an Apple security employee was initially prohibited by Samsung from inspecting a Vietnam-based factory assembling display components for the iPhone X. Ultimately, the pair of companies reached a compromise wherein the Apple employee could be escorted through the facility as long as he agreed to walk without stopping to inspect his surroundings.

As a result of the secrecy, Apple has had trouble learning how Samsung fixes manufacturing problems with iPhone displays. For example, Apple has had to perform more rigorous display tests during product development in order to spot defects than it would, had Samsung cooperated.

More reasons to diversity the supply chain

Interviews and internal documents have shown that Apple hasn't had much success so far in breaking free from Samsung.

Former Apple workers recall Samsung forcing Apple to accept hundreds of thousands of extra MacBook displays several years ago, despite Apple having lowered its demand forecast for the device. In contrast, according to former Apple employees, most other Apple suppliers bear the financial risk of holding and covering the expense of surplus parts.

Apple has partnered with other display suppliers such as LG and BOE, but Samsung remains the primary supplier, especially for OLED manufacturing for iPhone displays. According to two former Apple employees, LG attempted to provide OLED panels for some iPhone 12 and iPhone 13 models, but Apple informed LG that its screens didn't satisfy its standards.

Apple has to continue efforts on microLED manufacturing and hopes to introduce a microLED display in the Apple Watch until at least 2024 or 2025, according to two people familiar with the company's plans. But it will still need to rely on Samsung for many more years.

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13 Comments

gatorguy

said about 1 year ago

"...In a 2017 incident, Apple engineers flew to South Korea to meet with Samsung's display division employees. But they couldn't enter Samsung's facilities, including office buildings, because the company wanted to protect its intellectual property covering OLED display technology."

I have zero doubt that Apple feels the same way when companies visit their offices too. They are equally as protective of their technology.

thadec

said about 1 year ago

The editorial slant of this article is amazing. What is Samsung supposed to do? Let Apple take their IP and use it to create a competing product? Without even licensing it or paying for it? I know that people have this "every other global corporation is cutthroat and sometimes shady but Apple who is 100% above board" but consider this context:

1. Right now having the best screens in the business is Samsung's sole market advantage. No one cares about "thin and light" anymore (something that Samsung refuses to acknowledge because they sunk hundreds of billions of R&D into competing with Apple in this area). Google has adopted much of their UX and multitasking software - the portions that most people actually like - into base Android. The Chinese Android phones are faster - as they design them to be overclocked without throttling as opposed to being as thin and light as possible - and cheaper (state subsidized). So if Apple does the same what will Samsung have left?

2. It isn't just smartphones and tablets either. Samsung uses their screens to push their (overpriced) laptops - it is the reason why they don't sell desktops - as well as their TVs and monitors. No, Apple doesn't make Windows or ChromeOS laptops, TVs or general purpose monitors. Fine: what keeps Apple from licensing the tech (or worse, know-how process knowledge that can't be copyrighted or patented) to companies that do just to spite Samsung?

3. Don't forget that Apple is the same company that used Qualcomm's IP for years without paying for it using the nonsense justification "we invented the smartphone and tablet so without us your IP wouldn't be worth anything anyway ... so we should pay substantially less for the same tech as everyone else including our direct competition." (Yes, the iPhone made Qualcomm's LTE and 5G patents more valuable. But without mobile radio technology mobile phones like the iPhone wouldn't exist in the first place. Anyone remember the Apple Newton? Exactly. By contrast though they weren't making as much money, Qualcomm was doing fine selling their tech to Nokia, Blackberry, Motorola etc. before the iPhone came along.)

4. And finally, do not forget that Apple spent years suing Samsung with copyright infringement lawsuits that they knew they had no chance at winning but were designed to either A. intimidate Samsung into abandoning the smartphone market (this was before Android took off, which Apple honestly never thought would happen, as some old "Android will never outsell iOS!" articles on Apple Insider from around 2010 and 2011 can attest) or B. ruin Samsung's reputation as a "copier" and "thief" which worked as people still refer to Samsung as such as this day despite the fingerprint sensor and abandoning the headphone jack are the only two things that Samsung has copied from Apple in over 10 years (and even there, Motorola was technically first with the fingerprint sensor and Samsung's budget phones still have the headphone jack). Meanwhile, Apple freely appropriates features and design language from Samsung wholesale - been the basis of nearly every major change to the iPhone and iPad since the iPhone 5 - and no one bats an eye.

Samsung and Apple need each other. But they don't like or trust each other. And the reasons for their emnity are mutual. (Another example: Apple bought Beats, for example, for the sole purposes of short circuiting Samsung's very successful cross licensing deal with them. Proof? What has Apple done with Beats since buying them? They haven't released new headphones in 6 years, new earbuds that were actually good in 4 years, and I can't even remember the last major Beats advertising campaign.) Oh yeah, and the thing about how Samsung refuses to agree to the terms that Apple usually forces on their suppliers ignores how many Apple suppliers have been bankrupted by those same terms. Samsung has the clout to prevent Apple from taking them to the cleaners like what happened to GT Technologies. Who ... doesn't exist anymore. The reason: https://www.reuters.com/article/us-apple-gt-advanced-tech/gt-advanced-bankruptcy-offers-warning-to-apple-suppliers-idUSKCN0HX0XV20141008

Amazing how Samsung's actions to protect itself is being spun as a negative here.

badmonk

said about 1 year ago

Samsung is notorious for stealing IT from smaller companies and so to portray Samsung as a victim in its relationship with Apple seems to be a stretch.

They are largely responsible for the decline of the Japanese electronics industry (albeit some of this was the Japanese resistance to change). But their strategy was using other companies IP and under cutting them in price and then riding out litigation.

kenaustus

said about 1 year ago

thadec said:

The editorial slant of this article is amazing. What is Samsung supposed to do? Let Apple take their IP and use it to create a competing product? Without even licensing it or paying for it? I know that people have this "every other global corporation is cutthroat and sometimes shady but Apple who is 100% above board" but consider this context:

Y0u seem to ignore that Samsung Lost a major case on the iPhone where a jury awards Apple a billion dollars for that theft. Samsung has a real problem with Apple from that blatant theft, where try needed lawyers instead of designers and engineers to develop their own Apple type phone I order to get out of paying that award.

At some point Apple will ban Samsung from their products and Samsung share holders will dump the Samsung Executive,

sflocal

said about 1 year ago

badmonk said:

Samsung is notorious for stealing IT from smaller companies and so to portray Samsung as a victim in its relationship with Apple seems to be a stretch.

They are largely responsible for the decline of the Japanese electronics industry (albeit some of this was the Japanese resistance to change). But their strategy was using other companies IP and under cutting them in price and then riding out litigation.

Agreed. Even after all those years of Samsung doing everything it could to evade getting busted for IP theft in court for everyone to see, people here and elsewhere still apply their own revisionist history to paint Samsung as a good guy.

I don't remember if it was the judge, or Samsung's own lawyer that could not tell the difference between Samsung's own phone and an iPhone during the court proceedings. That's how blatantly obvious Samsung was when stealing the look & feel of the iPhone.