MicroLED displays might help Apple cut costs

Apple (AAPL) is developing its own MicroLED displays at a secret facility in California, according to a recent report from Bloomberg. These displays, intended for use in the Apple watch as well as future iPhone models, might help the tech giant cut costs.

MicroLED is a display technology similar but superior to OLED, where each pixel lights up individually providing splendid contrast and power efficiency. Unlike OLED, the new technology uses inorganic materials.

Apple currently gets its phone and Apple Watch screens from Samsung and LG, respectively. The tech giant has been looking to develop better display technologies and rightly so because the MicroLED technology would bring forth brighter and more power-efficient smartphones. Developing its own MicroLED screens in-house will give the company benefits in costs and profits while also reducing its dependency on other suppliers.

The team at the facility is said to have created Apple Watch-sized screens using the MicroLED technology, and it is believed these will soon be used in the watch for the first time commercially. The new technology is likely to make it to Apple Watch before the iPhone.

Apple is making efforts to gain as much control as possible over its various aspects of production as well as its product technologies. Earlier, it was reported that the tech giant was looking to secure long-term contracts for the supply of battery materials to avoid shortages.

Apple believes that having control on as many of its processes and technologies will enable cost efficiencies and better profits. The company also believes in protecting its technologies through patents to avoid unnecessary conflicts that hinder its growth.

Apple’s R&D expenditure is expected to increase significantly over the coming years, and the company appears to be moving into areas of R&D that it previously refrained from entering.

Investing more in building differentiated features seems like the right thing to do as it is expected to give Apple more competitive strength. However, at a time when Apple is facing margin pressure along with declining unit sales, higher costs that come with these investments could put a damper on its plans.