Is OLED Apple's Next Flash Disaster?

Apple's decision (NASDAQ: AAPL  ) to not allow Adobe's (NASDAQ: ADBE  ) Flash technology onto any of its mobile devices was once the buzz of the blogosphere. Steve Jobs' determiniation to battle for HTML5 and other protocols led to the irritation of many, and the reality that for a period, the functionality of many websites didn't work on your iPhone or iPad. The company released a comprehensive explanation for its decision, but some consumers probably made alternative purchase decisions because of Apple's position. You didn't need to be a huge Adobe supporter to want website content to just work.

Fast-forward to today, and you have to wonder if Tim Cook's railing against OLED technology at a recent Goldman Sachs event is a little bit of history repeating itself. One of the highlight buzzes of this year's Consumer Electronics Show was the OLED technology demonstrated by Samsung. With capabilities including screen flexibility and near indestructibility, it's difficult to see how picture quality will compete with the display options that OLED make possible, but until they're actually available, it's hard to be sure.

A brief look back at Flash
For a specific period, Adobe Flash was the cornerstone of much of Web design, allowing users to integrate the eye-popping multimedia functionality that allowed one site to stand out from others. One of the central arguments Adobe advanced in favor of its adoption by Apple was the reality that users couldn't get a "full Web" experience without Flash. Apple countered that alternative options were available that favored mobile devices. Since the height of the battle, and as more and more sites go to a specific mobile version, the issue has become less pronounced. I can't remember the last time I had a Flash-driven browsing problem. Even so, there is anecdotal evidence that the mess hurt Apple, if only very temporarily. All the same, Adobe and Apple seem to still be going strong.

Cook's mixed messages
Cook recently slammed the picture quality and color saturation of OLED displays, such as those offered on the Samsung Galaxy S III that's helping Samsung give Apple a serious run for its money. Cook argues: "If you ever buy anything online and really want to know what the color is, as many people do, you should really think twice before you depend on the color from an OLED display." Not surprisingly, he believes the company's Retina display is the superior choice and the obvious choice.

There are two problems with taking this position too seriously. First, what else is Apple's CEO going to say? "We really wish what we have were better, but the competition has made better choices and had more success"? As Apple dipped to $200 per share, Cook would be fired and become the subject of the largest shareholder lawsuit in the history of litigation. We expect our company CEOs to talk up their products. Just don't take them too seriously as news.

The second, and more curious, reason to raise your eyebrows is that Apple seems to being doing some critical hiring in the OLED space. A recent story reported by the OLED Association explains that Apple recently hired Jueng Jil Lee, whose OLED experience is greater than that of anyone currently on Apple's staff. Lee's experience includes time at both LG Display and Cambridge Display Technology. The story is vague as to Lee's specific role in the Apple ranks, but it strongly suggests that he will be involved in integrating OLED technology into Apple's arsenal.

It's obviously worth noting that the story comes from a source whose very purpose is the promotion of OLED technology. You would no more expect a negative report from this group than one panning Retina displays from Cook. Still, to the extent that the news is factual, it certainly places a different patina on Cook's recent words. While rumors about the pending release of an iWatch from Apple abound, the company is badly in need of a game-changer.

While it's unlikely that a fully flexible screen is on the immediate horizon, one of the innovations Samsung demonstrated at the CES was the functionality possible if an OLED screen is wrapped around the side of the device. Then, even with the phone upside down or with a cover on, a text message can be displayed on the side. There has been no confirmation that the technology will be included in the new Galaxy S IV when it is released, but the suggestion has been made.

This may not be actionable just yet from an investment perspective, but if Apple's foray into OLED proves accurate, that is definitely bullish for the stock. Unlike Flash, OLED has the potential to change a great deal about the very nature of smartphones, and Apple can't afford to be left behind. Watching for developments in the arena is a must for all Apple shareholders.

There's no doubt that Apple is at the center of technology's largest revolution ever and that longtime shareholders have been handsomely rewarded, with more than 1,000% gains. However, there is a debate raging as to whether Apple remains a buy. The Motley Fool's senior technology analyst and managing bureau chief, Eric Bleeker, is prepared to fill you in on both reasons to buy and reasons to sell Apple and what opportunities are left for the company (and, more importantly, your portfolio) going forward. To get instant access to his latest thinking on Apple, simply click here now.


Read/Post Comments (13) | Recommend This Article (8)

Comments from our Foolish Readers

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  • Report this Comment On February 16, 2013, at 3:28 PM, e1618978 wrote:

    Apple's rejection of flash killed flash and hurt Adobe, but I don't see how it hurt Apple at all.

    http://gizmodo.com/5859029/adobe-yeah-apple-pretty-much-murd...

    OLED is completely different - Apple rejecting flash killed flash for everybody, Apple temporarily rejecting OLED has no effect on other manufacturers.

    Also, OLED really does suck.

    http://www.displaymate.com/Nexus_One_ShootOut.htm

  • Report this Comment On February 16, 2013, at 3:41 PM, sammycooool wrote:

    Apple has no plans to innovate anytime soon. Buy their products as someday they will be collectors items as many just throw them out now.

  • Report this Comment On February 16, 2013, at 4:19 PM, marv08 wrote:

    The author makes the assumption that flexible screens can only be made possible with OLED technology. This is completely wrong. E.g. IGZO panels can also be made in a flexible manner. And that kind of makes the entire article useless.

    All tests by display experts support Cook's statement. You do not get truthful color reproduction on any current OLED display, and their readability in bright light (e.g. outdoors) is a lot poorer than with conventional IPS panels (as used by Apple and also e.g. Nokia on the Lumia 920). Apple did chose the better technology. Period. Calling that a "disaster" is beyond clueless.

    Apple's "no" to Flash on mobile devices forced millions of sites to adopt real standards that are open and more power efficient. So, no disaster either.

    Try again.

  • Report this Comment On February 16, 2013, at 4:23 PM, Jjkiam wrote:

    What a ludicrous article. Virtually everyone has rejected Flash now as it has been replaced by HTML5. So the premise is wrong from the start. Also Oled still has serious problems ESP with blue color burning out very quickly. Perhaps this will be fixed in the future but not at the present. Implying that Apple has a problem is a joke as there are other display technologies such as IGZO that is currently superior to current Oled displays Just another analyst following the media meme of trying to place Apple in a bad light.

  • Report this Comment On February 16, 2013, at 4:29 PM, e1618978 wrote:

    Jjklam - no doubt! It is pretty comforting to see how the stock price can't seem to go below $450 or so even with all the misleading negative press that Apple has been getting though.

  • Report this Comment On February 16, 2013, at 7:35 PM, Jeagan1999 wrote:

    Anyone following Apple would know that they have partnered with Sharp and will most likely adopt Sharps' IGZO (Indium Gallium Zinc Oxide) LCD technology which has several distinct advatages over OLED's or regular LCD's...including lighter, thinner, less power consumption and the ability to mold and shape into different shapes. The fact that they are bypassing OLED's may actually turn out to put Apple years ahead of their competitors tables and phone screens!

  • Report this Comment On February 16, 2013, at 7:50 PM, applefan1 wrote:

    Hey Sammycooool,

    It looks like you actually know something.

    I'm still trying to figure out what that is.......

    yeah, Apple didn't innovate a thing.. Is that why most companies are trying to look, act, and design their products, and other aspects of their company after Apple?

    Actually, OLED has had a lot of problems over the years and I don't know if all of them has been dealt with because I don't really care much about OLED.

    IGZO is a new technology from Sharp, it's got a LOT of strong promise in that it is supposed to be better than any previous technology.

  • Report this Comment On February 17, 2013, at 1:46 AM, apptoday wrote:

    You really have no clue, do you? The real reason that Flash is a deadened technology is not because of Apple, it is because Flash's business model. For years Adoble had painted itself into the corner by adding features and supporting a handful of desktop platforms. It was never meant for a mobile platform. On top of that, Adobe only makes money from Flash authoring program, not the players. With the increased number of devices and versions, it meant Adobe had to ramp up development without increased revenue. So Adobe made the tough decision: Not to support Flash "plug-in" for mobile browsers.

    As for OLED, that is entirely a different story. Who makes the best OLED screens right now? Samsung. Who has the most OLED capacity right now? Samsung. Apple complained about OLED is just a smokescreen: Apple just can't get enough quality screens from Samsung.

  • Report this Comment On February 17, 2013, at 8:57 AM, bonzo99911 wrote:

    The current OLED screen is not comparable to the quality of Retina Display, period. This issue has been discussed many times by third party publications like CNET and AllthingsD. Retina display has a much better colour accuracy and a deeper saturation at all range of hues except for black.

    By the way, Samsung is not the developer of the OLED technology. They pay license fee to Universal Display and Dupond Chemical for each OLED screen that they produce. It's about capacity and frankly any manufacturer can build up its capacity if they can secure large orders over extended period of times. In fact, that's why Apple wields so much power in the supply chain. With so much order for a single product line, they basically have an ability to turn a smallish supplier into another Samsung!

    OLED has a potential to be a superior technology to the LCD based Retina display, but the current technological constrains make it inferior on many important aspects. With the adoption of IGZO, you can say goodbye to OLED for another 3 years or so. As indicated by its recent hiring activity, Apple will probably have solved those constraints and developed relationship with other OLED suppliers by that time.

  • Report this Comment On February 17, 2013, at 9:14 AM, bonzo99911 wrote:

    @apptoday,

    While you are correct on the reasoning behind the Adobe's decision to drop mobile flash, it does not change the fact that most websites now has alternative solutions because of Apple. When iPad first came out in 2010, many multimedia contents on regular, non-mobile websites didn't work because they required flash plug-in. Now I don't really have to worry about that kind of problems when using my iPad. Even porn sites don't use Flash these days!

  • Report this Comment On February 17, 2013, at 10:39 AM, techy46 wrote:

    It's interesting how a consumer technology supplier like Apple can be so arrogant about other's real technology. Hopefully Intel, Microsoft, Nokia and Samsung will knock Apple off of their pedestal. In the meantime enterprises rely on technology from IBM, Intel, Microsoft, Oracle and SAP to automate their businesses and increase productivity so consumer can waste their incomes on Apple's toys.

  • Report this Comment On February 17, 2013, at 10:50 AM, bonzo99911 wrote:

    @techy46,

    Relax, the hate is consuming your sanity!

  • Report this Comment On February 17, 2013, at 11:25 AM, SRNoyes wrote:

    This is an interesting article attempting revisionist history.

    Adobe had promised for years a version of Flash for the iPhone and Apple initially welcomed the concept if they could deliver a working version with acceptable performance. Apple eventually gave up after 2.5 years of waiting for something that had been promised in 6 months. Adobe never was able to deliver viable working Flash implementation for mobile with acceptable performance in speed and battery life. Period. Even its performance on Android once delivered was extremely poor at best and it was that poor performance on Android that has helped iOS become the mobile standard for web browsing with Android a distant second.

    As for Tim Cook's comments on OLED? They are spot on. OLED currently has serious issues in color reproduction and consistency. The Blue LEDs tend to age a variable rate making color calibration spotty at best with color shifts happening in as short of 6 months (one reason for the oversized blue pixels on the GNII). You can add to this over-saturation of colors and a complete loss of detail on reds and greens and you have a display that will look "pretty" to the masses but have no bearing on reality.

    Likewise, since many OLEDs use a Pentile display text is not as crisp as the resolution would leave you to believe. If you have looked at the poor text on the GSIII (Pentile) compared to the GNII (non-Pentile) you know what Pentile is and how detrimental it is to text image quality. For people that are really interested in substance over form, OLED is currently a non-starter.

    And yes, OLED will improve. It will eventually get its saturation issues under control. Blue LED life span will be improved. Brightness in sunlight will be improved. And yes, I am sure Apple is still watching the tech with a close eye.

    Personally, having seen IGZO LED tech side by side to conventional LED and OLED, I really hope Apple gets IGZO on devices. Stunning display clarity. Dead reckoning on color. Less power than LCD and OLED.

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