Low production yields, high costs, and high risks could be the reasons behind the possible cancellation of Apple’s “microLED” project for its Apple Watch Ultra. A decision that, according to display supply chain consultants at Counterpoint Research, would be related to what was stated in a press release issued in these hours by ams OSRAM, one of the possible suppliers of panels made with this type of technology.
“A key project underpinning the microLED strategy was unexpectedly cancelled today, prompting the company to re-evaluate the microLED strategy”
These are the opening words of a press release in which the Austrian company states that it is still in negotiations with “the customer” and that, following the cancellation of this “fundamental microLED project”, the future use of its resources related to its microLED strategy, in particular the new 8-inch LED plant in Kulim (Malaysia), will still be reconsidered.
So far, neither company has confirmed that ams OSRAM has been chosen as the supplier of micro LED display panels for the upcoming Apple Watch Ultra. However, in recent months, the Austrian company had announced that it expected a significant increase in revenues in 2025, the year in which the release of an Apple Watch Ultra 3 with this technology was initially planned.
“The shock is still deep,” said ams OSRAM CEO Aldo Kamper during a conference call. The company had already started the construction of a factory in Malaysia by investing about 1.41 billion dollars, probably precisely to meet the order received. “We thought everything was on the right track,” added CFO Rainer Irle, who also confirmed the possibility of selling the new plant.
The statement made in the press release that there are still ongoing discussions with this customer, however, could also suggest that an Apple Watch Ultra with a microLED display is not entirely ruled out but can only be further delayed. The launch of the device was initially scheduled for 2025, then postponed to 2026.
According to rumors, Apple has been actively developing microLED technology since it acquired California-based company LuxVue in 2014 and has continued to invest significant resources. Initially, the idea would have been to adopt them already on the iPhone X. MicroLED displays offer significant improvements over OLED displays. These include higher brightness, better energy efficiency, and a higher contrast ratio. On the other hand, they are still very difficult to make and come with a high price tag.
A microLED panel, in fact, could cost Apple up to $150, which is four times the cost of manufacturing the current OLED display. Usually, the selling prices of products that use displays bought at $150 are then sold for around $1,500. $150 is also more than what Apple pays for the 6.1-inch and 6.7-inch OLED displays on the iPhone 15, which cost $80 and $120, respectively. An Apple Watch Ultra with a microLED display, as a result, could cost as much as a high-end iPhone, evidently too much.