An improved Apple Pencil is also under development and expected to launch alongside the updated tablet.
Apple is unlikely to use OLED for the 2018 iPad lineup and will stick with LCD, according to the report.
The company's upcoming iPad will come with slimmer bezels like the iPhone X, and that means Apple will have to get rid of the home button and Touch ID from its tablet.
However, the new version of the tablet is unlikely to include an OLED screen, which provides more vivid colors and sharper clarity, the people said. The Cupertino, California-based company reported last week that iPad revenue rose 14 percent to $4.8 billion in the fiscal fourth quarter, with an 11 percent increase in the number of units sold.
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Apple still sees the iPad as its future for mainstream computing and has upgraded the device's capabilities in successive years to appeal to business and professional users.
The iPad itself is enjoying a bit of a renaissance this year, thanks largely to the launch of the 10.5-inch iPad Pro and the new, affordable 9.7-inch iPad.
Today's details from Bloomberg shared that next year's iPad Pros will adopt Face ID, which KGI also recently predicted. It is much more hard to produce large quantities of OLED panels than it is to manufacture LCDs. Bloomberg says that the majority of display suppliers don't have the ability to make OLED panels for the iPad, with only Samsung Display being the exception.
Face ID, the facial recognition system that debuted on the iPhone X, could be landing on the iPad Pro as early as next year, but that's not the only iPhone X feature the iPad Pro 3 could inherit. One iPhone X feature not coming to the iPad is an OLED display.