It turns out that Apple really thought about implementing AMOLED displays in the next generation iPhone, but had to reject the idea due to problem with supply and technology.

As Digitimes reports:

“According to our sources, Apple had spoken with Samsung Mobile Display (SMD) about the possibility for AMOLED panels since the development of the iPhone 3GS, but production capacity remains a big issue. SMD only has the capability to fulfill 50-60% of iPhone orders at the moment even it dedicated all AMOLED capacity to Apple.

Of course, cost is always a concern. AMOLED panels cost US$34-38. TN panels cost less than US$10 and IPS panels around US$20.

AMOLED also has display weaknesses. SMD uses PenTile technology developed by Clairvoyante to produce AMOLED, which is less suitable for displaying text. With Apple quite keen on pushing e-reading businesses, AMOLED may not be the best solution at the moment.”

So there you have it, folks. The whole truth is coming in 12 days, by the way.