It’s been some time since smartphones overtook expensive sneakers as the status item on the street. But with growth in mobile devices slowing of late, technology is taking a back seat to fashion and style.
Your iPhone from a year or two ago probably does most of what you need. In order to lure you to trade up to the next model, then, style comes into play. And one of the biggest ways to develop style is glass, the kind on your smartphone’s screen that you gaze into for hours at a time—how it looks, what kinds of curves it has, how vivid it is.
One of the big draws of the next Apple (ticker: AAPL) iPhone, some predict, will be a single curving expanse of glass encircling the device from front to back, as if there’s no border or frame around the display of icons—rather like an infinity pool at a fancy resort.
The push in glass promises to lift the fortunes of companies large and small. They include chip equipment maker Applied Materials (AMAT), which not only supplies Intel (INTC) and other chip makers, but also sells machines to churn out gigantic pieces of glass from which phone and TV screens are cut.
Potential winners could also include Universal Display (OLED), a small firm that gets paid royalties for every TV and phone with the most advanced technology; Corning (GLW), long a major force in glass production; and the makers of finished displays, Samsung Electronics (005930.Korea), and its Korean competitor, LG Display (LPL), whose largest owner is LG Electronics (066570.Korea), Samsung’s Korean competitor in smartphones.
Investments to make glass do amazing things are rushing forward. Spending by Samsung, LG Display, and others for flat-panel display fabrication equipment is set to rise to $17 billion this year, from less than $7 billion two years ago. That figure doesn’t fully reflect the enormous change in the world of screens that has come with smartphones.
Traditionally, the amount of glass that was produced by Samsung and its competitors was dominated by television-set production. TV makes up 40% of the output of displays, says Cowen’s Robert Stone, drawing upon data from research firm IHS Markit. Mobile phones and other devices with small screens represent 20% or so of output.
In the most cutting-edge realm of displays, however, the reverse is true. A special kind of light-emitting diode, referred to by the acronym Amoled, for “active-matrix organic light-emitting diode,” is mostly used by smartphones and other devices with a display smaller than a TV set, says Stone. Amoled is more efficient and more malleable than traditional liquid-crystal displays.
Amoled is growing faster, too: In square meters, the rate of Amoled glass for phones will overtake the rate of growth of glass for TVs this year, writes Stone.
Amoled technology is newer and therefore smaller as a portion of the total display market. But it is where the growth is. The revenue from Amoled displays is expected to rise by about 30% this year, to approximately $20 billion. Conventional LCD display sales are rising by only some 5%.
That is a result of the fact that the smartphone is the screen that matters most in one’s life—for getting work done, for social media, for taking pictures, and so on.
THE FOCUS ON DESIGN for the iPhone, as with all other phones, is paramount. Last week, this column pointed out a new function coming to the iPhone and other makers’ wares, called 3-D sensing (“Stalking the Component Makers for the iPhone X,” Feb. 11). But in an age of look-alike devices, the average consumer may be more drawn by looks than by functions.
Explaining the difference between Amoled phones and others, Stone says that “you could put someone in front of an Amoled smartphone, and some might discern the difference in image quality,” while many would just see yet another screen.
The phone, however, lends itself to a more intimate experience, one that you can both feel and see. “If you make a phone with curves, or one that can fold in half, which is coming, anyone would spot that difference,” he says. “That’s the sort of thing you can do with Amoled that you can’t do with a conventional LCD.”
Applied Materials has already signaled the boon to come from Amoled. Chief Executive Gary Dickerson last week called it a “tremendous growth opportunity,” noting that half the company’s business for its display tools is “for new companies in mobile OLED display.” He was referring to companies looking to build capacity for Amoled glass to compete with Samsung.