NPD DisplaySearch – the market research organization – stated this Monday, that the Apple (NASDAQ:AAPL) Watch features an AMOLED (Active Matrix Organic Light Emitting Diode) display that costs a $27.41 cost per unit. This statement was followed by a comparison of the cost to the $45 per unit cost for the Retina display in iPhone 6. It is believed that this cost is inclusive of display along with cover glass, touch modules and labor.
Of this total cost of $27.41, $7.86 is because of the display alone. The rest of the cost is basically due to the cover glass and touch module.
A patent report was posted somewhere in July that was named “Apple Reveals Ongoing Development of Next-Gen OLED Displays”. This report showed that AMOLED displays are preferred – because of contrast ratios – to LCDs (Liquid Crystal Displays).
Another patent report was posted in May named as “Apple Invents New Methods for Improving AMOLED Displays.” A comment by Tim Cook somewhere in 2013 stated that Apple (NASDAQ:AAPL) had no interest in AMOLED displays; however the company seems to have changed its mind about it.
Charles Annis of NPD stated that design flexibility comes from the plastic AMOLED, which is present in the device. This flexibility is mostly due to the thinner display. It was reported that it is at least 65% thinner as compared to any traditional LCD.
Annis reported that Apple (NASDAQ:AAPL)’s use of plastic AMOLED for the display of its smartwatch shows some strategy from the company and its confidence in these displays. This device is set to revolutionize the industry of wearable computers.
With Apple (NASDAQ:AAPL)’s current entry in the supply chain of OLED, there may be a change in OLED display market. The shipments of these OLED displays have been quite steady for some time. Only Apple (NASDAQ:AAPL) alone used 8 million of them in the fourth quarter of this year. This shipment rate was only 1 million last year, which shows that the manufacturers need to increase their supply to meet the demand that is likely to increase next year. Why? Because Apple (NASDAQ:AAPL)’s move to use the AMOLED is likely to trigger a chain reaction where competitors will come out with their devices featuring the AMOLED.
Vice President Hiroshi Hayase of small/medium displays of NPD states that smart watches are devices that normally feature flat displays. Flexibility and shape are two features stated by the VP that are highly important in smartphones. He states that the small size of the smartwatch won’t affect the demand of OLED.
It is believed that the watch will sell at a price somewhere near $349 in 2015 – with two different display sizes. The watch is expected to move away from the trend of failed smartwatches and create some sort of an impact in the market. It will be interesting to see how customers will react to the new features of HealthKit and other features that include iMessages, small and simple apps and Facebook access through the smartwatch.