Apple supplier dropping billions on future screen technology; iPhone sales outlook remains bearish

Apple supplier LG Display Co. will reportedly be investing around 10 trillion won (AU $11.57 billion) on developing next-generation screens. The investment, which covers a three-year period, is in part of the company's bid to counter slowing growth and competitive edge amongst competitors. Analysts, however, still claim that iPhone sales are set to slow, although growth should return soon enough, according to Forecasts.

LG will be focusing more on screens powered via tiny organic light-emitting diodes or OLEDs. According to Bloomberg, the Seoul-based company will be banking on "growth in demand for advanced displays." These also include televisions, wearable devices, foldable screens and even televisions.

Chief Executive Officer Han Sang Beom discussed in a statement: “The investment aims to make LG Display grow as a sustainable company." Also, the executive added that LG is looking into pioneering "this untapped OLED market to sustain our leadership in the display industry and keep the competitors at bay.”

Apple may be in line for such development considering the partnership between the two companies. The global OLED market is expected to grow as much as AU $32.4 billion in 2022.

Nonetheless, despite the possibilities for such growth, Apple may have to brace itself for a more pressing matter as analysts forecast slowing growth for iPhone. This should still be a good sign according to Pacific Crest’s Andy Hargreaves. “We see the risk/reward on AAPL as positive,” Hargreaves wrote, as quoted by Barrons. “Despite our relatively positive structural view, iPhone 6 drove an extraordinary period of upgrade activity and share gain that we do not believe is repeatable.”

According to the analyst, the math around the matter is their basis for predicting the slowdown of the iPhone. The company believes iPhone cycle is likely to decline year-over-year in the first half of 2016. The view is also backed by analysing Apple’s component suppliers. Nonetheless, the decline should just be a transitory issue for Apple.

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