A new bill has been introduced in the House of Representatives that would require owners of operating systems with over 100m US users (such as IoS or Android) to  allow users to choose their own default applications or app stores, as opposed to having the choice made for them with pre-loaded applications.  It also requires that OS owners allow users to hide or delete pre-installed applications or app stores.  Developers must also be provided with access to the OS interfaces, hardware, and software  at the same level as the company or its 3rd party partners.  Under the bill OS companies cannot require that developers use the company’s in-app payment system as a condition for access to the OS or app store, and cannot require pricing terms that are more favorable than on other comparable sites, while they are also restricted from using non-public information collected from an application on their platform to compete with that application.
Currently a number of states have passed or are discussing similar legislation, but most are focused on age verification (Utah put it into law).  Florida has proposed a law that would force Apple to open access to outside app stores and payment systems and a number of other states have proposed legislation that allows sideloading and prohibits mandating OS owned applications.  However, this bill would set rules at the federal level and would prohibit states from enacting laws that would be counter to actions stated in the federal bill, which is the 2nd of its kind to be introduced to Congress.  Similar bills have been subject to aggressive lobbying, partisan politics, and challenges from companies and 1st Amendment supporters, and we expect this bill will face the same, but as politicians look for causes that are popular with consumers, we expect Apple and others will ultimate lose some of their proprietary ‘rights’ and face a more level competitive playing field.  Its hard to tell if the time is right for such a bill to pass, but bills that have gone before and failed have at least built some awareness, so if consumers get more involved in the conflict, the law will eventually be put into effect.  Whether it would be better as a federal law or a state law, depends on who you ask.  Full text of the bill here
​

​The Indian government has indicated that recently (March to early April) Apple (AAPL) has been air shipping iPhones from their production sites on the sub-continent to the US in order to beat the latest round of tariffs.  According to sources in India, six cargo jets have been used, each with a capacity of 100 tons, to move the phones into the US before the April 5 deadline, with the last one earlier this week.  This capacity implies, using a package weight of 12.4oz, that the total shipments included ~1.5 million iPhones (not our calculations), that had been part of an emergency assembly program that included a Sunday production addition at Foxconn’s (2354.TT) largest assembly plant, and an accelerated push through customs at the Chennai airport that cut customs throughput time from the usual 30 hours to ~6 hours.  For reference Foxconn typically ships between $110m to $331m (value) from India to the US monthly, but saw shipment value increase to $770m in January and $643m in February.  It was said that the Indian government put in a request with customs officials to ‘support’ Apple’s expedited clearance, which the company had been planning since last June as tariff rhetoric increased.

Apple (AAPL) has changed its healthcare focus from a meager “Project Quartz” to a more meaningful and robust “Project Mulberry”, including AI agents to collect and process the data that Apple devices collect about you.  This is not the ‘secret stuff’ brands collect, like what OS you are using, what device you are on, your search results (if you let them), and almost everything about what you have bought[1], but more the data that you allow Apple to collect by using the Apple watch, your iPhone, your AirPods, and even some 3rd party applications.  This is ‘health’ data, that includes sleep patterns, steps, calories, heart rate, weight, and a variety of other metrics about your bodily functions.
The objective is to provide Apple users with information that will make them healthier and more fit, but Apple, even before the platform is available, has made the upgrade to AI agents and an integration with Apple Intelligence, to make that information more ‘real-time’, personal, and meaningful.  The agents are the scavengers that will poll your Apple devices for the health information they collect and bring it to Apple Intelligence for monitoring and evaluation.  It is thought that Apple will not only offer you evaluations of your nutritional and sleep habits but could even offer camera-based assessments of your workouts and access to educational videos, put together by internal and external health experts. 
While the range of detail is thought to delve into physical therapy, mental health, and even cardiology, the initial focus is thought to be nutritional, with monitoring and alerts leading to personalized health advice based on your data, although there has been talk of AI-based mental health counseling and chronic disease predictive analysis.  As one might expect, Apple’s focus seems to be on the ‘user experience’, the part of the Apple persona that allows them to charge a premium for their products, but Apple is certainly not the first to go in this direction in this new age of AI.  Google’s  (GOOG) Fit is a similar collector of personal health data through Android’s Health Connect.  This platform allows permitted 3rd party apps to supply and collect data that feed the Google Fit app, but is more a collector, aggregator, and visualizer than an advice tool, although Google is currently working to integrate that data into its other health related services, with a tie-in to reference ‘reputable sources’ on YouTube.
Amazon (AMZN) also has a health program, but its focus is more oriented toward B2B with the Amazon Pharmacy supplying information on medications and interactions and the Amazon Clinic and One Medical able to set up virtual video or text sessions with clinicians (some on staff) that can evaluate conditions, make diagnoses, and prescribe medication for relatively common illnesses.  There are also companies like Noom (pvt) or MyFitnessPal (pvt) that are more specific to food and calorie management but given the enthusiasm for Ai that seems rampant across the health sector, we expect almost every health related application to leverage AI to stay competitive.
There are a few caveats here, particularly HIPAA regulations which regulate any health information that is maintained or transferred.  Entities involved must encrypt health data, limit access, perform risk assessment, maintain audit trails, breach notifications, and take ‘reasonable steps’ to prevent access to or disclosure of patient information.  HIPAA is difficult enough to understand and maintain, but adding AI to the mix opens everything up to new legal questions, many of which have yet to reach the courts and as liability becomes a potential issue when health-related advice is being given, we expect many new court cases that will not only focus on the potential liability of poor or incorrect data, but will include questions of algorithmic bias, inadequate software testing, and the fact that Ai systems are essentially ‘black boxes’ that make it impossible to derive where or how an AI arrived at a particular diagnosis or conclusion. 
Smart lawyers will not only include site owners but also those who wrote the algos that run them, looking for biases that could cause hallucinations, errors in judgement, or flawed diagnoses based on poor human vetting.  When Ai developers are called into court to defend issues like what data was included in an AI’s training or what process was used to draw a conclusion, high level math will not be how they are judged by a jury, so while Apple jumps into the fray to provide a positive health experience through Project Mulberry and Apple Intelligence, its not like Wikipedia, where you take things with a grain of salt.  Healthcare decisions affect people’s lives, as some can be significantly influenced by the information given by Ai healthcare.  There are good and bad doctors, and sometimes doctors make mistakes, which is why malpractice insurance exists, but will there be malpractice insurance for an application that gives incorrect advice or misdiagnoses an ailment or mental condition?


[1] IP Address
Device Type & Model
Operating System
Device Identifiers (trackers like AAID, IMEI
Screen Resolution
Installed apps (some)
Browser type & version
Cookies (optional)
Browsing History (Optional)
Location Data (Optional)
Referring websites
App usage
Contacts & Calendar (Optional)
Photos & Videos (Optional)
In-app purchases
Search queries (Optional)
Social Media Activity
Shopping activity
Form submissions
Wi-Fi network name
Data usage
Bluetooth data
Sensor tracking
Accelerometer & Gyroscope data
Ambient Lighting data
‘like’ data
DNS lookups
…To name a few.

China’s largest display producer BOE (200725.CH) and Korea’s largest display producer Samsung Display (pvt) are locked in a race to be the first to produce IT OLED panels on Gen 8.6 substrates.  Current production is done on existing Gen 6 OLED production lines, but with expectations that demand for OLED laptops and monitors will continue to increase, and the carrot of Apple’s (AAPL) slow but steady conversion of its mobile products to OLED, the race continues to escalate.  OLED It panels can and are produced by both (and others) on Gen 6 OLED lines, but the number of panels that can be produced on one substrate of Gen 8.6 glass is more than twice the number that can be processed on one Gen 6 substrate, so overall fab efficiency is higher for Gen 8.6.
Of course, the necessity for increasing OLED IT panel production volumes is based on demand, so both Samsung Display and BOE are making the bet that OLED IT volumes will continue to increase, although both are starting production at levels below the stated capacity of the fabs, and both stating that the expansion to full capacity will take place as the market continues to grow.  Some of this open-endedness comes from Apple, who has been thought to be adjusting its OLED transition plans due to weak market conditions, but when making long-term plans (fab equipment has a 5–7-year depreciation term in South Korea and a 7 year term in China) shorter -term factors carry less weight.
So how much does it cost BOE and Samsung Display to build out these new fabs?  SDC has the advantage of being able to reuse fab space that was previously used for large panel LCD production, so no greenfield cost, but lots of modifications for new equipment.  Samsung Display is using Canon (7751.JP) as a source for the deposition tools it is building its fab around, which are estimated to cost ~$400 million each (2 are needed for a 15k line) with another ~$100 million for vacuum chambers and logistical equipment that is tied to these tools, so the key equipment cost alone is over $600 million. 
BOE has selected Sunic Systems (171090.KS) to supply their deposition tools for an expected ~$500 million price tag (inclusive of associated equipment) so BOE will have a cost advantage.  This seems to have lit a fire under Samsung Display to beat BOE in being the first to mass produce IT OLED products on a Gen 8.6 platform, gaining the advantage of experience, a key to improving yield.  In that vein, SDC took delivery of its 1st (of two) Gen 8.6 OLED deposition tools about a year ago and has been refining the process and tool characteristics since the installation was completed.  The 2nd tool is expected to be delivered within the next 2 – 3 months.  SDC has stated that they expect to begin mass production in 2026, however more recently there have been indications that SDC is planning to begin mass production this year, likely putting at least the first (of two) lines about a year to 18 months ahead of BOE.
Again, the risk to both producers is how rapidly the market for OLED IT products develops and how much of that capacity can be produced on existing Gen 6 capacity.  In the table below we look at rough (very) shipments for OLED IT products in 2023 and 2024 and we note that it is estimated that Apple (iPad Pro) was responsible for at least half of the growth in OLED tablet shipments.  Given that there is a considerable amount of global Gen 6 capacity, even another year of strong unit growth could be covered by existing Gen 6 capacity, albeit a bit less efficiently, so the necessity for either SDC or BOE to begin production at these new facilities is less critical.  

​That said, much of the existing Gen 6 OLED capacity is unable (as it stands currently) to produce some of the more esoteric OLED stacks and backplane configurations that Apple seems to desire and are becoming the leading edge in IT OLED production technology, so we have to sub-divide  demand further into ‘advanced’ OLED IT and ‘regular’ OLED IT production, and that is where both SDC and BOE will really compete.  LG Display (LPL), who produces ‘Advanced’ OLED IT products on its Gen 6 OLED lines and has yet to announce plans for a Gen 8.6 OLED IT project, is also a competitor and one that has been qualified as a full-scale producer for Apple using its current Gen 6 fab, so things get even murkier when LG Display is put into the mix.
All in, SDC and BOE will duke it out for leadership in this new Gen 8.6 OLED IT category and will likely not get much out of the results for the first few years, while LG Display has the option of remaining a Gen 6 OLED IT player or stepping up to Gen 8.6 and incurring the risk of taking on a considerable financial burden and hoping that the market can support all three players quickly.  It is good that the industry is progressing in terms of its ability to efficiently produce OLED IT products, but the necessity for immediacy seems a bit harder to understand.  Samsung Display has always been the leader in RGB OLED production and as BOE is the masthead producer for the highly competitive Chinese display industry, neither seems to have much choice that to compete at this point, while LG Display will likely be the only profitable supplier of IT OLED for the next few years without the cost and depreciation of a new fab.  If it’s between 1st or 2nd place and losing money for the next few years and 3rd place and making money now, we go for the bronze.

​Samsung Display (pvt) has committed to OLED in a big way, ending its many years of large panel LCD production.  The company’s OLED focus has made it the leader in RGB panel production for smartphones, but as OLED became dominant in the small panel market SDC realized that it could not maintain it singular dominance in that space as competition from China increased.  To that end, SDC is building RGB Gen 8.6 capacity specifically designed for the production of larger OLED panels for IT products, such as tablets, monitors, and notebooks.  There are a number of manufacturing challenges that make this expansion more than just adding capacity as the deposition equipment has to be specially designed and processes have to be modified to make such a change, but as is typical of SDC, they are willing to take the risk to become the leader.
China’s leading panel producer BOE (200725.CH) understands that while it continues to produce large panel LCD displays, it must compete directly with SDC in this emerging space and has begun construction of its own Gen 8.6 OLED for IT fab and Visionox (002387.CH), a smaller Chinese OLD producer has begun the planning for OLED for IT capacity.  This leaves one major panel producer, LG Display (LPL), with no announced plans for such expansion, despite its close relationship with Apple (AAPL), who is expected to drive OLED IT demand as it transitions its product line to OLED over the next few years.
LG Display already produces OLED for IT panels on a Gen 6 line and was the first producer to develop the tandem display structure that Apple uses for the iPad, but it does this production on a Gen 6 line, which makes it less efficient than a Gen 8.6 line would be.  This has caused considerable speculation about why LG Display has not committed to building a dedicated Gen 8.6 OLED for IT line to compete with rivals SDC and BOE.  Much of the speculation was based on LG Display’s financial situation, which has been strained over the last few quarters, but with the sale of the company’s LCD fab in China, the pressure has lessened, and the assumption has been that LGD would commit to the new fab early this year.
It seems that this will not be the case if a story out of South Korea is correct, as it indicates that LG Display is actually preparing to do just the opposite.  Instead of adding Gen 8.6 OLED capacity, or adding additional Gen 6 OLED for IT capacity, the information suggests that LGD is actually planning to reduce its existing OLED for IT capacity and convert it to additional Gen 6 OLED capacity to produce iPhones.  The motivation for the change would seem to be Apple, who has seen relatively weak demand for the OLED iPad, which has led to lower utilization rates for LGD at its OLED for IT fab.  In response the story says that LGD wants to convert some of its Gen 6 OLED for IT capacity to iPhone capacity, as it expects to increase3 its iPhone production for Apple this year by almost 17%. 
Such a change would not be cheap as the new iPhone OLED line is expected to cost ~$1.36b US, after LGD spent almost $2.6b US to build the Gen 6 OLED for IT line.  It would also indicate that LG Display does not believe that the demand for OLED IT products will grow as quickly as some predict (OLED penetration into the IT market is expected to reach 2.8% this year and 5.2% next year), essentially betting on iPhone growth and its own ability to capture additional iPhone production share from SDC.  Given LGD’s relationship with Apple, and the fact that Apple has likely financed a portion of LGD’s Gen 6 OLED for IT fab construction cost with pre-payments, Apple would have to sign off on the plan, a tacit agreement as to the potential for a weaker demand picture for OLED for IT going forward.
All in, this is a major decision for LG Display if the story is true, and one that LG Display has been unable or unwilling to make while others have committed.  If LGD decides to reduce OLED for IT and that market takes off it will fall far behind its rivals.  If it reduces OLED for IT capacity and OLED IT demand is less than predicted it will have bypassed months or years of low utilization at a very expensive fab.  No pressure…

The rivalry between South Korean panel producers (Samsung Display (pvt) and LG Display (LPL)) and Chinese panel producers has been ongoing for a number of years as Chinese producers have pushed South Korean producers out of the large panel LCD business.  As it became obvious that Chinese producers had the advantage of significant government construction and operating subsidies, South Korean producers began shifting from LCD display production to OLED production, a relatively new technology at the time.  While Chinese large panel producers eventually won the battle for LCD display domination, South Korean producers went on to establish OLED as a higher quality technology, particularly for small panel displays.  Not to be outdone, Chinese panel producers have been building OLED capacity to challenge South Korean dominance in the OLED space, and while there are a multitude of CE brands that use OLED displays, the top of that list is Apple (AAPL).
Apple’s transition from LCD to OLED starting with the iPhone X, released om November 3, 2017, is expected to continue for the next few years as they migrate much of their product line to OLED.  Samsung Display and LG Display have been the primary small panel OLED suppliers to Apple but are continuingly being challenged by China’s largest panel producer BOE (200725.CH), who has made some inroad with Apple, supplying replacement displays for earlier iPhones and as a 3rd supplier for some later models.  While BOE has had its own issues with Apple, they continue to challenge SDC and LGD, along with a number of smaller Chinese OLED producers, and SDC has gone to the US ITC alleging patent infringement, with BOE, and other Chinese OLED producers (Chinastar (pvt), Tianma (000050.CH), and Visionox (002387.CH)) responding by challenging the validity of those patents in US Patent Court.
As the ITC investigation continues (target date 3/17/25) the patent challenges also continue, and the US Patent Review Board has ruled on one of the 4 patents that Samsung claims were infringed upon.  The ‘683’ patent, filed by Samsung Display on 11/13/17 in the US and 3/6/12 in Korea makes 15 claims concerning OLED pixel structure, particularly Samsung’s ‘diamond’ pixel structure shown on the left side of  Figure 1.  The PTAB has decided that 10 of the 15 claims made in the original patent are not valid, while leaving 5 intact.  Samsung will have the opportunity to appeal that decision. 
Limiting the broad scope of a patent is not an unusual outcome in patent review cases, but narrowing the patent will also narrow the ITC’s investigation scope, making SDC’s case a bit harder, and could open one of the other patents included in the investigation to further scrutiny as it is essentially a continuation of the ‘683’ patent mentioned above.
All in, the validity of the ‘shape’ characteristics of the pixels (polygon, Octagon, or non-quadrilateral) as specified in the ‘683’ patent, remain in effect, which is a key point in terms of the infringement, but spacing between pixels, size, and arrangement, the other ‘683’ claims, are invalidated, reducing the points that SDC can cite in the ITC investigation.  We expect SDC will appeal the PTAB decision, but this ruling and any potential appeal will likely push out the final ITC decision and the battle for OLED supremacy will continue in both the consumer space and the courts for another year.  That’s how lawyers put their kids through college.

[Note: The US Patent Office considers a patent unpatentable when the difference between claimed subject matter and prior art would have been obvious at the time of invention by a person having ordinary skill in the art to which subject matter pertains, where ‘ordinary skill’ means a degree in electrical engineering, material science, physics, or similar disciplines, along with 2 years of professional experience working with display design, including OLED displays or an equivalent level of skill, knowledge, or experience.]

One of the more disconcerting aspects of VR is the fact that you, as an outsider, in the same room with a VR headset wearer, cannot see the wearers eyes, which means you have not visual clues as to where they might be looking, and to a lesser degree, what their full facial expression might be.  While some VR headsets have externally mounted cameras that allow the VR headset wearer to see his or her surroundings, others nearby have no idea where the user’s next move might be or whether they have any idea that someone is in the room with them.  Apple (AAPL) has discovered this quirkiness and has added a feature set to the soon-to-be-released Vision Pro headset that they feel would solve the problem, although we expect not everybody might agree.
According to developer literature for the Vision Pro, when the user first purchases the headset, they go through a procedure similar to a developing an avatar where the user holds the headset in front of their face and takes a series of facial ‘shots’ including a number of expressions.  The system then creates an avatar based on the ‘shots’ and when the user puts the headset on, the avatar is projected on the front faceplate.  This looks, to someone on the outside, as if the users eyes are visible, although it is actually the eyes of the avatar, which, while it has relatively limited resolution, Apple uses some effects to hide the quality of the image.
“EyeSight” as Apple calls it, seems to be unique to the Vision Pro, and will likely be used for other even more unusual effects by developers after the device is in actual circulation.  The question is, is it more disconcerting not to know where the users’ eyes are looking or to see the visual image shown below.  We make the assumption that the system is able to track eye movements with enough speed not to make the avatar’s movements jerky or unnatural, but there is still something a bit creepy about the feature.  We are not sure if the Apple solution is the ultimate one, and we do give Apple credit for identifying the issue and proposing a logical solution, but it still seems a bit disturbing.
Here's the link to the short (50 sec.) avatar set-up video.
https://twitter.com/i/status/1724539857752519028
​

​When consumers say a CE product is ‘hot’, that is usually a good sign, however, despite the positive expectations and strong pre-orders, the new iPhone 15 series is hot, but not necessarily in a good way.  It seems that some consumers have found that their new iPhone’s have been getting hot, hot enough that they automatically shut down until they can cool down.  While this does not seem to be a widespread problem, it does seem to happen across the entire iPhone 15 line, which tends to end the speculation that it is related to the Titanium shell that is used on the iPhone 15 Pro and Pro Max.  While the internet was abuzz with speculation about why this might be happening, such an issue can quickly become a marketing nightmare, as it did for Samsung (005930.KS), when it was forced to recall 2.5m Note 7 smartphones in September of 2016 when they were found to not only overheat, but also catch fire due to battery issues.
Apple (AAPL) has responded to the on-line furor over the weekend, making the following statement:
“We have identified a few conditions which can cause iPhone to run warmer than expected.  The device may feel warmer during the first few days after setting up or restoring the device because of increased background activity.  We have also found a bug in iOS17 that is impacting some users and will be addressed in a software update.  Another issue involves some recent updates to 3rd party apps that are causing then to overload the systems.  We are working with these app developers on fixes that are in the process of rolling out.”
What is Apple actually saying?   Your phone will be hot for a few days after you start using it because things are running in the background that will stop after a few days.  What things and what are they doing, and what will they be finished with in a few days?  What ever these ‘few conditions’ are or why they are running the phone hotter than normal, Apple did not say.    Is the bug in iOS 7 part of the overheating problem, and when will it be addressed in a software update?  What are the ‘3rd party apps doing that would overload the system?  Are they demanding too much processor time or bandwidth?  When will this be fixed, whatever it is?
We give Apple credit for at least addressing the issue quickly, however the bigger question is whether Apple will disclose the actual issues and whether the software fix will affect the abilities of the iPhone if it is the only alternative.in the near-term.  Apple lost a $500m class action lawsuit in 2020 for throttling the performance of some iPhones in order to fix processor and battery problems without informing consumers and faced similar suits in Europe.  It will be essential that Apple is honest with consumers, about the issue and the fix, given past history.  If they need to throttle performance to avoid the issue until a more permanent fix can be found, that’s fine (coming from an Android user), but more specific details are necessary to keep the general public from becoming wary of problems with the iPhone 15 series, and you know competitors will use that to their advantage whenever possible.  Waiting for the “Forged in Fire and still on fire!” YouTube videos…

As we have noted, Apple is picky about companies in their supply chain and those that want to join.  Whenever possible they try to maintain 3 to 4 suppliers for each component, in order to make sure supply will not be interrupted in the event of a catastrophe with one supplier.  Such a situation occurre4d in late 2021 when Sharp’s (6753.JP) camera module factory in Ho Chi Minh City was closed due to COVID quarantines.  At the time, Sharp’s component inventory for the iPhone 13, which was being assembled for its 9/24 release, were moved to LG Innotek’s (011070.KS) in Hai Phong, which remained open.  Since then LG Innotek has maintained a ~70% share of Apple’s iPhone camera module supply, with Sharp the #2 supplier, with Foxconn (2354.TT) and Cowell Optics (1415.HK) the smaller suppliers.  In 2021 Apple removed China’s O-Film (002456.CH) from its supplier list after it was accused of using forced Uygur labor and put on the US entities list in July of that year (since removed).
Apple spends roughly two years working with suppliers to prepare for a new iPhone release and Sharp did not participate in the iPhone 2016 program, so it is assumed that they will not be involved in the iPhone 16 release in 2024, with LG Innotek likely to pick up much of the slack as they have expertise in ToF, which is being added to the iPad and folded zoom modules, which will be added to the iPhone 15 Pro Max this year.  A folded zoom lens uses prisms to bend light before it enters the lenses, allowing them to be placed horizontally, rather than stacked from front to back.  This allows the camera module to be thinner, but it also requires an image stabilizing actuator, which will also be supplied by LG Innotek and Jahwa Electronics (033240.KS), also a supplier to Samsung.