Huawei is currently ranked as the third largest smartphone vendor in the world. The Chinese OEM, eager to improve its image in territories like the USA, has gained a lot of global attention for highly competitive pricing yet an impressive product line-up. Indeed customers have responded with open arms as profits and sales have soared this year. Still, when it comes to matters of QHD display resolutions, Huawei has taken a rather hard-line approach: not using them. A new report however, suggests that things may be unfolding in a new path to progress, literally: come this time next year, the world may be looking at a Huawei flagship with a Samsung Edge display.
The story, posted by one of China’s more well-known leakers, i冰宇宙, alleges that Huawei is planning to produce 3 million units of this curved display smartphone per month. While nothing is yet known about the device being referred to – including the screen size – the realization of such a product would be a very important one for both companies involved.
While the i冰宇宙 account has posted several leaks in the past that did pan out, it is important to take what is discussed herein with a suitable dosage of salt. Situations are constantly evolving or changing and 2016 is still quite a bit far out from today. With that said, this topic definitely calls for some in-depth analysis.
The QHD resistance
Earlier this year Yu Chengdong, one of the Huawei’s executives, posted commentary regarding the use of QHD displays and the toll it takes on battery life. According to GizmoChina, which basically translated it, “[Yu] asserts that it is almost impossible for a human eye to distinguish a difference [with QHD]…he thinks that this is too big of a trade-off for a battery life. [He] also stressed that Huawei made some tests recently with the Meizu MX4 Pro and the Xiaomi Mi Note Pro…In particular, [he] stresses out the unreasonable specs of the Xiaomi’s Mi Note Pro. He thinks that having only [a] 3000mAh battery, which needs to power a 5.7 inch screen, which has 2k resolution is not enough at all.”
The post can be seen here for reference:
Indeed Huawei is not alone in its reservations about QHD, as the General Manager of Sony Mobile Taiwan had spoken about his company’s aversion to the pixel race. Ironically enough however, the Verizon Xperia Z4v would soon be announced, and then of course IFA happened and all bets were off as the Japanese juggernaut unveiled a 4K display device with an unthinkable 2 days of reported battery life. Again though, the parallel: concern with battery life and an apparent willingness to bump up the screen spec once the issue has been addressed.
Provided any of this speculation is true, the first question one might ask is just why Samsung of all companies, would be willing to share its cutting-Edge display technology with one of its largest competitors, especially in a massive market like China.
Sales pitch and problems
Despite the occasional product that releases using AMOLED displays, Samsung is by and large, the only OEM to consistently and constantly manufacture products with EL panels.
The problem is that production itself is rather expensive, especially when compared to traditional LCD or even TFT panels. Even if AMOLED may save battery life and provide better color reproduction – if not downright fantastical – OEMs have arguably felt the need to do without them, or else not pay whatever cost Samsung is asking (assuming there is even an offer to begin with).
Whether this means lowering the selling price of SAMOLEDs or offering long-term contracts with good terms for the buyers, time is money, and there is none to be made should no one be willing to give either.
Component costs affect the bottom line regardless of if the manufacturer opts to pass the savings onto customers or not. Consider the following, hypothetical situation: if an SAMOLED panel costs $100 to use, and a IPS LCD costs $50, the cheaper option will potentially allow either a $50 “savings” for the OEM, or else a $50 “discount” for the customer, or perhaps a little of both. While it’s difficult to know exactly what the real numbers are given the confidential, undisclosed nature of contract negotiations and volume discounts, the above example hopefully serves to illustrate the point at hand.
Samsung has been eager to get more manufacturers to use its SAMOLED panels, and needs to ensure this happens. Whether this means lowering the selling price itself or offering long-term contracts with good terms for the buyers, time is money, and there is none to be made should no one be willing to give either.
In addition to this, cnet has proposed yet another idea, that “it might have something to do with Samsung Electronics. That company is competing against a wide range of mobile-device makers that don’t want to fill the coffers of its parent company, Samsung. Instead, they’ve used other display makers to provide mobile visual experiences to customers and sidestep having to pay Samsung for anything.”
A final consideration, now that LG clearly has the means to produce an Edge-type panel of its own, Samsung needs to act fast before its chief rival does. The situation is only exacerbated by the recent trademark filing for an LG G Edge.
A win-win situation
Putting aside the component cost and coffer situation, we are still left with the burning question of why Samsung would want to give a leading rival such a competitive Edge. Literally, as this case may be. Consider that Samsung itself, is not just one company, but hundreds. One of those deals with mobile phone manufacturing. When push comes to shove however, Samsung – the conglomerate – wants to increase sales and profits, and it needs to look out for the greater good than just one arm of its empire.
Huawei sells a lot of phones, and now more than ever before. In fact, in the first six months of this year (ending June 30 2015) its Consumer Business Group reported that sales of Huawei smartphones rose 39 percent – compared with the same period last year – to 48.2 million, resulting in an 87 percent year-on-year increase in revenue to $7.23 billion. That is a lot of phones, and not only was the year but half over at that point, the OEM wasn’t done releasing new products, either. Considering how large growth was in the first half of 2015, the second holds untold troves of treasure to sell…and then tell.
Samsung, meanwhile, has been suffering as of late. The Galaxy S6 failed to ignite revenue, owing largely to the existence of the S6 Edge. One might imagine that, after the lackluster performance of the Note Edge last year, some reservations were made as to the potential success of 2015’s curved flagship. Lo and behold the S6 Edge was by far the better seller, though due to unexpected demand there weren’t enough panels to go around. (This resulted, for reference, in Samsung opening a third factory to manufacture them).
Reports have already come in suggesting the Galaxy S6 Edge+ has failed to resonate with the market, and given that its brother is only available in a limited number of countries, the second half of 2015 may shape up to be quite a bad one. This, when coupled with the Korean conglomerate’s falling out of the top ten most valuable IT companies with respect to market capitalization is not exactly going to boost investor confidence.
The solution then, is simple: get more Samsung parts in other company’s phones. There is zero income or profit to be made in a scenario that sees Huawei sell 100 million phones using rival company’s screens. There is potential, however, in a scenario that sees Huawei sell 100 million phones using Samsung panels. Even if Huawei were to use them in only 1% of all devices sold, that would still be income that Korea’s largest OEM would otherwise not have in accounts receivable.
Huawei wants to sell phones, and it wants to be – and remain – competitive. When it comes to flagships, sooner or later consumers will take note as more rivals have QHD displays and it doesn’t. Arguably one great way to solve the problem is to make use of AMOLED displays which will alleviate some of the strain on battery life. So Huawei gets to stay competitive while still looking out for its consumer’s interests.
Samsung wants to sell displays, and it wants to be – and remain – competitive. If all Android phones sold were Samsung products, the problem would be non-existent. This is not the case, and therefore Samsung must do what it can to make money. This income can then be put back into R&D which will, in turn, lead to further advancements in displays and other product categories as the future unfolds. Samsung can then ensure it remains ahead of the pack such that even if its phone division continues to slip in sales, other key business areas such as display panels and SSD units can continue leading the way.
Blinded by the light
For all those still sour on the idea of a marriage between Huawei mobiles and Samsung displays, consider that someone is manufacturing the dual curved edge display found on the as-of-yet-unannounced BlackBerry Venice. While it could in fact be LG, speculation has already been offered about the idea of Samsung supplying them.
In addition to this, reports continue of incoming devices that will use other Samsung components, such as the Exynos 7420 SoC, so why not offer to display things as well? The very idea of Samsung providing AMOLED displays for Huawei itself goes back at least a month, so it’s not even that surprising to hear more advanced rumors and reports. And of course, there is the brand new Mate S which makes use of an EL panel; while it is currently unknown as to just who provided it, Samsung is indeed a likely candidate.
Despite the arguments contained in this piece, it is largely speculative: nothing official has been announced about any Huawei product using a Samsung display, Edge or otherwise. We would love to hear your thoughts on the matter, though. Would Samsung be foolish to allow other companies to have access to some of its most advanced technology? Does it have to in order to keep sales strong? Does the idea of a Huawei device with an AMOLED panel appeal to you? Would it change the way you perceive Huawei, or Samsung? Be sure to take the survey below, and then drop us a comment and let us know!