If you have the patent on this tech and the ability to manufacture them in bulk why would you sell? There is a huge potential here and selling it to one of the big guys to just then sit on a few billion at home seems quite a boring life.
Apple can easily license or buy from them which is what they do with other tech. Apple does not make OLED panels themselves nor do most that use OLED panels in their products.
Apple has frequently used exclusive advanced screen technology as a differentiating factor in their products. Retina displays, better colour fidelity, wide colour gamut, 5K, etc. Previously they have done so by working together with screen manufacturers and underwriting the development of such technologies, the tool chains and manufacturing buildout with massive (Bns of dollar) loans, but actually owning the patents, tool chain and manufacturing gives them even more control and exclusivity.
Why doesn't Apple own an Iron ore mine and run an Iron smelting operation? Why don't they produce their own LCD panels in-house? Who don't they have a Lithium mine and produce their own Li-Ion batteries?
For Apple's needs they are perfectly capable of relying on the market to provide most of their components. Apple has no expertise outside of hardware design, system integration, and software, they are best left to concentrate on where their expertise lies rather than trying to cannibalize the entire supply chain.
While licensing (without a doubt) is a big issue, I think the infrastructure that Apple have in place for manufacturing and sourcing of materials is second to none.
This is only possible due to forward thinking people and a ridiculous amount of demand, the two together mean bulk buying prices available to them only.
The competition will catch up at some point, but I fear that it might require a couple huge mergers for this to happen.
Many of Apple's suppliers are also competitors. Samsung, for example, supplies a lot of iPhone parts while also selling iPhone competitors. I doubt it would be that difficult for others to source an equivalent display, if they're willing to pay an equivalent price,
This isn't how it works. Apple has exclusive deals in place with many of its suppliers. Many of the parts Apple buy are either not available for anyone else, or not available at the same price.
One way Apple has done this is to provide some of the initial capital needed for new plants/technologies. For example, if retooling a plant for new LCD production costs $1 billion, Apple might front 1/2 the money in exchange for 6-18month exclusivity on those panels.
Also, Apple has scale in its favor. They can negotiate better terms and ensure that their quota gets filled first.
It started about fifteen years ago, but Apple discovered that a great use for their extra cash flow was to buy up the processes they (and their competitors) would need in the future. When a screen manufacturer needed money to do the next big thing, then Apple would chip in significant funding and own a percentage of the new joint venture. They would not only get priority and lower prices on orders, but they profited from anyone else buying the same tech. Apple now owns an exclusive license to Liquidmetal, is a significant investor in Corning (Gorilla Glass), invested heavily in a Toshiba LCD plant, paid LG (for LCD) and various SSD manufacturers massive upfront payments for priority and/or exclusivity.
You can bet that Apple makes those suppliers sign exclusivity contracts, less to keep the panels out of the hands of competitors like Lenovo and more to keep the panels out of the hands of counterfeiters/knockoff-artists.
Just like to add that there are innovations in terms of manufacturing that affect the marketplace at large that are solely due to Apple requirements.
I'm talking about Gorilla Glass (factory funded by Apple so the inventor of the substance could churn it out for iPhones) and now Retina displays. Did Samsung build their own Retina production plant?
I also don't buy that essentially saying: "go find your own way to do this." Stifles innovation. Quite the opposite IMO.
First off, the idea that apple is buying a bunch of screens is speculation. It hasn't been confirmed by anyone involved. It is imformed speculation. Apple talked about making an investment in supplier to insure adequate supplies at their last earnings call. So we have a publicly stated motivation.
Now you're attributing another motivation to them, and what are you basing this motive on? The secondary effect of constrained supplies? Aren't you just simply assuming that apple is doing this to keep competition out?
And isn't it obvious that actual competition-- companies that like apple saw the opportunity and spent years working on a tablet- aren't likely to need the same component?
And wouldn't any reduction in availability immediately cause all the non-apple suppliers to boost output?
Trying to corner the market on anything they can make more of is a foolish proposition.
Speculative at best. High density display sales are ever-increasing across the market - it makes sense for Apple to diversify the supply chain. That said, it makes little to no sense to feed your competition purely from a business standpoint. Samsung can of course continue to sell their parts to other OEMs.
I don't have a link to a story to support this, but I heard they make more money off the sell of parts (screen panels, memory, etc) to Apple for iPhones than they do selling their own phones. Not sure if this is still true, but I do know it was true at one point.
Yea people said Apple would buy a display company, or many other companies, but they tend not to be interested in buying these manufacturing focused companies. It’s not high enough up on the value chain for them. Manufacturers also have exposure to lots of negative things like how workers are treated or pollution and things like that. It paints a target on their back that they don’t want.
I would imagine that this is the reason Apple likes to sit on a huge pile of money instead of giving it to investors. Any supplier that tries to put the hard word on Apple knows that they risk Apple massively investing in a competitor to get another source for components. Apple already has all of the silicon design know-how in house, I don't think they would have trouble finding another supplier if Samsung decided to be difficult.
Apple can easily license or buy from them which is what they do with other tech. Apple does not make OLED panels themselves nor do most that use OLED panels in their products.
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