The overwhelming success of the iPhone X has captured global attention and is one of the main reasons why so many people rushed to buy it. Its stunning display uses OLED panels, which significantly contribute to its premium pricing. Today, we’re taking a closer look at OLED technology through some recent data and exploring how its costs are evolving.
OLED displays often elicit strong reactions from users: 1) they look incredible; 2) they feel expensive. However, this perception is beginning to change as manufacturing costs for OLEDs decrease.
According to IHS Markit, a leading research firm, the cost gap between OLED and LCD panels is shrinking rapidly. Their analysis shows that the manufacturing cost for a 55-inch OLED UHD TV panel was $582 per unit in Q2 2017, a dramatic 55% drop from the first quarter of 2015. By Q1 2021, the cost is expected to fall further to just $242.
This reduction has brought the cost ratio down from 4.3 times that of an LCD panel in early 2015 to just 2.5 times today. While this still makes OLED more expensive, the trend is clearly moving in the right direction.
Jimmy Kim, a principal analyst at IHS Markit, noted that when the cost difference between an established technology and a new one narrows, the new technology tends to gain traction. He said, “The narrowing cost gap between OLED and LCD panels will help drive broader adoption of OLED TVs.â€
However, material costs aren’t the only factor affecting the price difference. Even though the total manufacturing cost of an OLED panel is currently 2.5 times that of an LCD, the material cost gap is only 1.7 times. Other elements such as yield rates, production efficiency, depreciation, and substrate size also play a significant role.
As production scales up to match LCD levels, the overall cost gap could shrink to 1.8 times. Kim added, “But due to the high depreciation costs of OLEDs, increasing production alone isn’t enough. Once depreciation is complete, the cost is expected to drop by 31% from current levels.â€
It’s important to note that this study focuses on television panels, not commercial display panels. As a result, the cost implications for digital signage are less clear. However, experts believe OLED will soon become more common in various applications.
With systems like the 56iq digital signage platform, OLED screens will offer even better visual experiences, making them more appealing for advertising and public displays. In the future, it's not just the iPhone X that will shine—OLED advertising screens and home TVs will become everyday fixtures.
This shift seems entirely plausible, and as production grows and costs continue to fall, OLED technology is set to become a standard in many aspects of daily life.
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