Huawei to Launch Mate 10 in October with an OLED Display
September 25, 2017
China's Huawei is slated to launch its full-screen flagship model, Huawei Mate 10, in Munich on October 16, featuring an AI-enabled Kirin 970 processor. The Mate 10 will take directly on Apple's iPhone X and Samsung Electronics' Galaxy Note devices as Huawei aims to challenge the top-two vendors in the global smartphone ranking race, said the sources. China-based Gionee is trying to expand overseas sales by launching its first all-screen model, M7 Power, in Thailand on September 28. Xiaomi released its next-generation all-screen model, MIX 2, in China on September 11. Utilizing its newly established retailing chain in China, Xiaomi aims to increase its market share in the domestic market. Other smartphone vendors in China are considering incorporating all-screen displays into sub-CNY1, 000 (US$152) entry-level models, a move, which could lead to the proliferation of all-screen smartphones in 2018. Huawei the largest smartphone brand in China is in talks with LG Display concerning a long-term supply agreement for small/mid OLED display panels. The deal, which should be finalized at an upcoming October 3 meeting between Huawei CEO Richard Yu and LG Display Vice Chairman Han Sang-beom at LGD’s Paju fab, is expected to be both a long-term supply agreement and a business development plan to allow both companies to work toward growing the relationship. Samsung Display is currently supplying small panel rigid OLED displays to Huawei.
Huawei started using OLED displays in their smartphone line in May 2012 but did not come out with another OLED smartphone until 2015, when they released the Nexus P and the Mate S. Since 2015 they have used OLED displays in a number of their flagship smartphones and we believe they are currently the 3rd largest user of OLED displays in smartphones in China, and the 4th largest worldwide, with ‾12m units this year, which we expect to grow to over 100m by 2020, giving them the largest OLED share in the Chinese smartphone market at that time. Chinese smartphone brands have a desire to use OLED displays purchased from Chinese panel producers, but Chinese OLED panel producers have not been able to supply sufficient reliable capacity yet, and while Samsung Display dominates the supply side, LG Display would be the next largest producer, particularly as it has recently announced the expansion of both its small panel and large panel OLED capacity.
The addition of Apple as a user of OLED displays in their iPhone line will create a conflict for Samsung Display, and while they have been cultivating Chinese smartphone brands as customers for their small panel OLED display business, it will be unlikely that, should Apple expand it use of OLED displays over time, Samsung Display will be able to supply small panel OLED displays to its parent, Samsung Electronics, Apple, and a number of Chinese smartphone brands, Huawei included. We believe Samsung Display will have to limit unit volumes to Chinese smartphone brands in 2018 and beyond, in order to maintain its relationships with its two primary customers. This scenario is what we expect will prompt Huawei and others to find a secondary supplier such as LG Display, as they continue to expand their small panel OLED usage, and while we expect Chinese OLED panel producers to continue to expand their small panel capacity, they lack the experience that South Korean OLED producers have developed over the last few years.
To complicate matters further, small panel OLED capacity is divided further into small panel OLED rigid and small panel OLED flexible capacity, which will become another issue that both small panel OLED display producers and smartphone brands will have to face. As smartphone brands adopt less static OLED display formats, their demand will shift from rigid OLED to flexible OLED and the small panel OLED industry faces a further bifurcation of capacity as small panel OLED fabs are dedicated to rigid or flexible capacity upon construction. It is possible to adapt an existing rigid small panel OLED fab to a flexible substrate, however it is a complex and expensive task, and while we do not expect the industry to move quickly to flexible OLED, it will become a significant consideration by 2019/2020. We would expect those smartphone vendors that continue to have an interest in migrating toward small panel OLED displays to make long-term commitments, such as the one discussed above, in order to guarantee sufficient volumes. Without such deals, they will be left to deal with local Chinese small panel OLED producers or take the ‘left-over’ capacity, if any, at Samsung Display or LG Display.