Is Samsung Display to blame for iPhone X’s screen defect?

With reports emerging over abnormal green lines appearing on the edges of the latest iPhone -- the first Apple phone to use organic light-emitting displays -- industry watchers are questioning whether the problem is due to the quality of the active-matrix organic light-emitting diode screens exclusively supplied by Samsung Display, or Apple’s incapability to adopt and manufacture the advanced-screen phones.

According to the smartphone parts industry, the main cause of the delayed launch of the iPhone X was the “poorer-than-expected” quality of Samsung’s Super AMOLED panels, and the complaint had been expected earlier in the industry.

“Samsung had to pay penalties for that,” a source in the display industry told The Korea Herald. “Apple had been very picky about the quality of the OLED, while Samsung had no choice other than trying to satisfy its customer.”

Apple has not officially responded on fixing the problem, but the US tech giant is reportedly offering to exchange the faulty phones for new ones, according to foreign news reports.

A similar problem was found last year when Samsung Electronics released Galaxy S7 smartphones that also used Samsung Display AMOLED screens. At the time, some Galaxy phones showed pink lines on their screens.

Another source told The Korea Herald that the yield rate of iPhone X smartphones was “significantly low” due to the iPhone maker’s inexperience with OLED panels.

“Apple would have encountered unexpected mistakes while assembling those parts for the iPhone X,” the source said. “They usually add some tuning to the original panels, so it is difficult to clarify where the faulty parts are made.”

Apple reportedly demanded strong confidentiality from parts suppliers about the iPhone X smartphones.

Samsung Display remained cautious on the issue, saying, “We can’t comment on the set maker’s issue.”

Determining whether the green line problem is caused by the hardware or software would be up to the investigation by the phone manufacturer, according to industry watchers.

A screenshot of an iPhone X's green line problem on Twitter

It is the first time for the Korean display supplier to solely provide the proprietary Super AMOLED panels for the world’s most expensive smartphone.

According to market researcher IHS Markit, Samsung’s AMOLED panels are estimated to be $110 per unit, nearly a third of the total cost of the parts, which stands at $370.25.

Domestic rival LG Display has also developed its own version of AMOLED, named Plastic OLED. AMOLED is a type of OLED display widely used in smartwatches, mobile devices and laptops that provides higher refresh rates than other OLED displays.

Despite the supply contract with Apple, Samsung Display’s sales ratio of its OLED business division has declined to about 60 percent of its total sales at 8.28 trillion won ($7.39 billion) in the third quarter of this year. It was also less than half of OLED sales in 2015.

Out of 970 billion won of third-quarter operating profit, the OLED business obtained about 600 billion won.

“If not for the penalty issue with Apple, and if the supply volume was not cut down, the OLED business earnings would have been better,” the industry source said.

According to the financial industry, Samsung is expected to provide approximately 60 million OLED panels this year, including the first 15 million units during the third quarter. The initial target volume was 90 million.

By Song Su-hyun (song@heraldcorp.com)