Does This Shed Light on Apple's OLED Plans?

With its groundbreaking earnings announcement Tuesday, Apple (NASDAQ: AAPL  ) just gave the world plenty to talk about for the next few months.

One of the most referenced quotes from CEO Tim Cook, however, came from the Q&A portion of Apple's earnings conference call. When asked whether he had any thoughts about potentially increasing the screen size of the iPhone from 4 inches, Cook replied:

My view continues to be that iPhone 5 has the absolute best display in the industry. And we always strive to create the very best display for our customers. And some customers value large screen size; others value also other factors such as resolution, color quality, white balance, brightness, reflectivity, screen longevity, power consumption, portability, compatibility with apps and many things. Our competitors had made some significant trade-offs in many of these areas in order to ship a larger display. We would not ship a larger-display iPhone while these trade-offs exist.

And by "competitors," you can bet Cook was primarily referring to smartphone behemoth Samsung, with its wildly popular Galaxy series devices. Samsung's upcoming Galaxy S4, for instance, boasts a huge 5-inch AMOLED screen, and its new Galaxy Mega will be available in ridiculously large 5.8-inch and 6.3-inch models. 

Samsung Galaxy Phones, Image Source: Samsung.

Apple loves me, Apple loves me not ...
Of course, Cook hasn't exactly hidden his disdain for OLED; back in February at the Goldman Sachs Technology and Internet Conference, Cook railed on OLED displays, calling their color saturation "awful" and telling consumers they should "think twice before [they] depend on" them for accurate color.

Naturally, that spooked investors in Universal Display (NASDAQ: OLED  ) , the company whose technology enables nearly every OLED device on the market today. Even so, I noted that Cook's comments seemed curious at the time, especially given that recent reports claimed Apple had just hired a senior OLED technology expert away from one of its primary screen suppliers in LG Display (NYSE: LPL  ) .

Meanwhile, LG earlier this week reiterated plans to spend more than 50% of its total capital expenditures budget on OLED development. While the company will certainly need to improve its mass-production capabilities to support its impending launch of large-screen OLED televisions, that hasn't stopped the rumor mill from wondering whether some of that capacity could be reserved for Apple.

After all, Cook also teased during the call of "a lot more surprises in the works," and "potential exciting new product categories."

So what does it all mean?
That brings me back to Cook's comments about not changing the iPhone's display until Apple can be sure all the kinks are worked out.

Consider this: In answering that simple question about screen size, Cook brought up "resolution, color quality, white balance, brightness, reflectivity, screen longevity, power consumption, portability, [and] compatibility with apps." While some of that could be chalked up to good old fashioned chest thumping, many would argue OLED might have the edge in several of these categories already.

The Galaxy S4, for instance, boasts a screen resolution of 1080 by 1920 pixels, good for a density of 441 pixels per inch. In comparison, the iPhone 5's 4-inch display has a lower resolution at 1136 by 640 pixels, and lower pixel density of 326 ppi.

And while the iPhone's LCD Retina display may currently have the edge in other categories like accurate color reproduction, brightness, and white balance, I can't imagine Apple -- with all its vast resources -- would find it that difficult to make the necessary tweaks to an OLED screen. In addition, keep in mind that critics have hailed the 55-inch OLED TV from LG as possibly the most lifelike television ever, with its near-infinite contrast ratio, zero motion blur, wide viewing angles, and rich colors -- and all at just 4 millimeters thin.

LG OLED Television, Image Source: LG.

If that weren't enough, as I've noted before, OLED also allows device makers to create screens that can be flexible, transparent, and nearly indestructible.

Foolish final thoughts
If LG's capex investments can solve the problem of supply, then, and if Apple's new OLED hire -- who, incidentally, helped lead LG's OLED TV effort -- can translate these advantages into an Apple device, Tim Cook could easily step out and say, "Look! We've fixed everything I said was wrong with OLED displays. Behold our amazing new device."

Mark my words, then: I'm going out on a limb to say at least one of Cook's "surprises" will include the first ever Apple device to utilize an OLED display. When that happens, investors will see Apple's stock in a whole new light.

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Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On April 25, 2013, at 9:37 PM, hiddenflem wrote:

    "When that happens, investors will see Apple's stock in a whole new light."

    How about the producer of said oled? who would it be? PANL? LG? how will investors see it?

  • Report this Comment On April 26, 2013, at 11:21 AM, 4aapl wrote:

    I'm not a screen expert and don't know about how the color, brightness, and such compare.

    On the other half of the things that Tim mentioned, what's the point of making a screen with a higher pixel density than what you can actually see with your eyes? And what if that comes with some tradeoffs, such as high cost, using more power (so lower battery life or larger weight of a larger battery to offset this), and less longevity. And don't forget slower performance from the same chipset, since you're dealing with more pixels, and likely more heat due to that.

    Is making that one "improvement" that the users will never see (at normal viewing distance) worth all of those negatives.

    It would be like making a supercar with an engine so huge that spits out so much torque that it spins the wheels when even close to putting the pedal down, in any gear on up to over 100mph. Sure, it's nice to have that power as a spec on a checklist, but you got extra weight, size, and cost, and then extra's to the suspension to offset that....all for a feature that doesn't help you in anything that matters.

    Maybe Samsung is using a different typical viewing distance than Apple (from online sources, Apple is using 10", which to me is about where you would hold one to look at something carefully, whereas standard useage might be 18"). But there is a point where a phone is just too close. Offhand, for a phone instead of Google Glass, it looks like there's no reason to go with a higher resolution than they already do.

  • Report this Comment On April 26, 2013, at 11:52 AM, middlenamefrank wrote:

    Yes, Tim, the iPhone display is superior to Samsung's OLED technology. That's why you're selling more iPhones than Samsung is selling Galaxies.

    Oh no, wait, Samsung is outselling you...........hmm......

  • Report this Comment On April 26, 2013, at 1:08 PM, droidxcon wrote:

    @4appl

    Your argument would be valid if you were comparing similar technologies but you're not.

    First off I hope you had the same feelings about the retina display wasting resources since it is also a higher PPI than the eye can see.

    I'm sure you didn't though.

    You mention a higher ppi will make the device slower , hotter and more power consuming which is not true. There is a reason OLED is the technology of the future it has faster switching rate while at the same time reducing dramatically from what an LCD would produce. LCD displays require more layers of construction one of them being a backlight that produces heat and therefore wastes power making it less power efficient. meanwhile OLEDs do not require as many layers making manufacturing less expensive. OLEDs also do not require backlights since the materials themselves emit light this produces more light with less energy lost to heat.

    So in essence your argument should be applied to keeping LCDs which creating more heat and wastes more power than an OLED. If those reasons are truly your concerns you should be a proponent of switching to OLED.

  • Report this Comment On April 26, 2013, at 1:59 PM, 4aapl wrote:

    Yes, OLED's have advantages, and likely some disadvantages. I'm not a screen expert, so I won't try to go there.

    I was merely talking about the number of pixels per inch. My understanding is that Apple is using a screen that's a little beyond the pixel density that the human eye can see at standard viewing distance. They're past it, so there's excess, but it's not excessive.

    OTOH, from above it looks like Samsung's S4 has roughly a third more pixel density beyond the iPhone, which is all wasted. Comparing just that display pixel density with what the eye can see, they have a lot of wasted capacity.

    It's that excess, compared with going with the same technology but at or around the visible limit, that uses more energy, more power, and more processing.

    Think about a rendered movie from Pixar. If they were going with double the pixel density vs their normal level, if they weren't doing everything with vectors they would have double the rendering time. They could double the CPUs in their render farm, plus a bit for the added overhead. Or they could increase their timeframe (ie slower). Either way, there are tradeoffs, and if it turned out that there was no way for any view to enjoy the added pixels, either now or in the future unless the human eye became better, it would be a big waste of time, money, and energy.

    I'm sure there are things that the S4 is better at, and personally I would like a larger screen than my iPhone 4S. But going well beyond the limits of any difference to the human eye is a bad choice.

    Can you think of any reason to go well beyond the limits of what the human eye can see? Like I said before, the only one I can think of is if the 10 inch viewing distance isn't a constant. If some people like viewing it at only 6 inches, it could be worth it. But if 10 inches is right for most people, then going well beyond that (whether Apple, Samsung, LG, or any other vendor) doesn't make sense from an engineering instead of PR perspective, and they would be better off spending resources on other parts of the overall package.

  • Report this Comment On May 02, 2013, at 10:04 AM, speechisntfree wrote:

    I love reading comments from the "technical elite"..... whose only knowledge comes from the specifications page on a website..... after they roll their mouse over whatever interactive is being used to then provide the couple sentences of explanation on the associated bell or whistle they're looking at.

    An electronics tech I know calls all these "necessary specs" you all rant and rave about "separators".....

    They separate you from your money..... unless of course you have the eyes of an owl and the ears of a dolphin.

  • Report this Comment On June 14, 2013, at 12:23 PM, AWinvestments wrote:

    Good post A.

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