Apple's iPhone 8 Redesign Will Likely Feature OLED Screens, Higher Price

Expectations are for Apple Inc. AAPL's iPhone 8 to involve a major redesign and upgrade, with the main enhancement being a flexible edge-to-edge OLED display.

Apple may need to raise the price of this model “to avoid margin compression,” Bernstein’s Toni Sacconaghi said in a report. He has an Outperform rating on the company and a price target of $135.

The OLED Display

Investors have been wondering whether there would be sufficient OLED screen capacity for Apple next year and the number of models of OLED phones the company could offer. Samsung would likely be the main supplier of OLED screens for Apple in 2017–2018, and the company seems to have “enough capacity to provide Apple with OLED screens for its entire iPhone lineup,” Sacconaghi stated.

The analyst estimated the cost of a large screen flexible OLED display at more than ~$50 for Apple, which compared with $20 for a similarly-sized rigid TFT-LCD display. He added, “Given other expected feature enhancements to iPhone 8, we believe that it will be imperative for Apple to raise price on the offering to avoid margin compression.”

It would unclear whether Apple would limit OLED to one offering, because it may be unable to secure enough supply or because “across the board OLED offerings (accompanied by a necessary price hike) might ultimately prove inelastic,” Sacconaghi added.