Apple said to be cutting jobs after killing its domestic effort to make Apple Watch displays

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Apple Inc. is shutting down a long-running project to design and develop its own smartwatch displays, ending another costly research and development initiative.

In recent weeks, the company has halted domestic efforts to make screens with microLED technology, according to people with knowledge of the matter. The display, which featured brighter and more vibrant visuals, would likely have been added to a future version of the Apple Watch before moving to other products.

But the cost and complexity of the effort ultimately proved too great. So Apple is now reorganizing the teams that handle display engineering and eliminating several dozen roles in the US and Asia, said the people, who spoke on condition of anonymity because the matter is private.

The move to shut down the project came around the same time the company decided to cancel work on the self-driving car. In both cases, Apple is giving at least some of the affected employees the opportunity to find other roles within the company. If they can't find new jobs – a likely scenario for some of them – workers will be furloughed and laid off. An Apple spokesperson declined to comment.

The display project was part of a broader effort by Apple to design more of its technology in-house. Although the company already customizes displays in its products, they are largely based on designs from partners such as LG Display Co. and Samsung SDI Co. By bringing more of that process inside Apple, the company hoped to gain an edge over competitors.

It also saw potential in microLEDs, which are made up of millions of microscopic light-emitting diodes, and wanted to play a key role in developing them. The technology uses less power, reproduces colors more accurately and allows for thinner devices.

The effort began within Apple's hardware engineering organization about seven years ago. It was later transferred to Wei Chen, who runs Apple's display group. The project – codenamed T159 – was transferred to Apple's hardware technology division a few years ago.

Apple also built its own screen manufacturing facility in Santa Clara, California, near its Cupertino headquarters, where hundreds of employees could test the production of MicroLED screens. Many of the job cuts include people at that site — as well as Apple display engineering centers in Asia near the company's supply-chain centers.

A tour of the Santa Clara facility this week showed the building was still operational, with cars in the parking lot and a small number of employees entering and exiting the building.

When Apple planned MicroLED years ago, it envisioned the technology as a successor to the current standard: organic LED screens, or OLEDs. MicroLED is expected to eventually be incorporated into all products from the Apple Watch to iPhones and Macs.

In 2018, the company believed it would be able to bring screens to the Apple Watch as early as 2020. This deadline was delayed to 2024, and then to 2025 and beyond. The situation was similar to Apple's work on the electric car, the release of which was postponed several times.

Despite all their advantages, microLED screens were difficult to produce in sufficient quantities. Their manufacturing requires cutting-edge technology and a complex process called LED transfer – placing pixels in a display. Although Apple owned the design and manufacturing process for MicroLED screens, it enlisted several partners to handle tasks such as mass production and LED transfer.

News of changes to the project first emerged in recent weeks, when suppliers announced they were losing microLED-related contracts. That includes AMS-Osram AG, which said the cancellation would force it to cut jobs, potentially sell a manufacturing plant and record a writedown that could reach $1 billion.

For now, Apple believes OLED is the best current solution for its smartwatches. But the people said it is still eyeing MicroLED for other projects. The company is identifying potential new suppliers and processes that could make the technology a reality in its devices, although this is unlikely to happen in the near future.

© 2024 Bloomberg LP


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