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Apple Inc.’s quest to adopt advanced displays for its next-generation iPhone hinges on a single supplier in the Japanese countryside.

Canon Tokki Corp., surrounded by rice fields in the city of Mitsuke in Niigata Prefecture, has a near monopoly on the machines capable of making screens with organic light-emitting diodes, which enable sharp, vibrant displays that use less energy. A unit of Canon Inc., the company of 343 employees has spent more than two decades perfecting the manufacturing equipment used by OLED screen makers.

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