Apple said it would cut jobs after eliminating internal efforts to produce Apple Watch displays

Apple Inc. is ending a years-long project to design and develop its own smartwatch displays, ending another expensive research and development initiative.

In recent weeks, the company has suspended internal efforts to create screens with microLED technology, according to people familiar with the matter. The displays, which featured brighter and more lifelike visuals, would be added to a future version of the Apple Watch — before potentially making it to other products.

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

The move to shut down the project came at the same time as the company’s decision to end work on a self-driving car. In both cases, Apple is giving at least some affected employees the opportunity to find other roles within the company. If they can’t find a new job – a likely scenario for some of them – the workers will be laid off and given severance pay. An Apple spokesman declined to comment.

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

He also saw promise in the microLED, which is made of millions of microscopic LEDs, and wanted to take a key role in its development. The technology uses less power, reproduces colors more accurately and allows for thinner devices.

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

Apple even built its own screen manufacturing facility in Santa Clara, California, near its headquarters in Cupertino, where hundreds of employees could test the production of microLED screens. Many of the job cuts involve people at that site — along with Apple’s display engineering centers in Asia near the company’s supply chain hubs.

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

When Apple hatched the plan for microLED years ago, it saw the technology as the successor to the current standard: organic LED screens, or OLED. It is expected to eventually push microLEDs into all of its products, from Apple Watches to iPhones to Macs.

In 2018, the company believed it was capable of bringing Apple Watch screens as early as 2020. That timeline was eventually pushed back to 2024, and then to 2025 and beyond. The situation was similar to Apple’s work on the electric car, the launch of which was postponed several times.

Despite all their advantages, microLED screens have been difficult to produce in sufficient quantities. Their production required cutting-edge technology and a complex process called LED transfers — putting pixels into the display. Although Apple owns the design and manufacturing process for the microLED screens, it has brought in a number of partners to handle mass production and tasks such as LED transfers.

News of a change in 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 write-down that could reach $1 billion.

For now, Apple believes that OLED is the best current solution for their smartwatch. But it is still looking at microLED for other projects down the road, the people said. The company is identifying potential new vendors and processes that could make the technology a reality in its devices, though that likely won’t happen anytime soon.

© 2024 Bloomberg LP

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