The main difference between on-cell and in-cell is the fact that the former technology allows manufacturers to move the touch layer into the outer glass (such as the protective Gorilla Glass / Sapphire layer). According to the source, this allows manufacturers to create higher quality displays (faster screen response, no smear, no jitter, better color reproduction and so on).
Electronic Design notes that on-cell technology not only simplifies construction and reduces costs, but delivers better optical qualities because there are fewer layers. "The reduction in the number of layers also reduces parallax errors providing a superior touch interface. Fewer layers also means backlight intensity can be reduced while providing the same brightness level."
Recent reports suggest that Apple has already partnered with LG Display and Japan Display for 4.7-inch panels and may have selected Innolux as its third supplier of displays.
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