Because LCD phone screens have to use a backlight that spans the entirety of the screen. In an LCD, even if you have most of the pixels turned off, the backlight behind them is still on, which gives them that not-so-black look. Whereas on OLED screens, each pixel has its own backlight which cuts down on the power consumption DRASTICALLY.
You’re premise is incorrect. They do have a massive drain on the battery compared to not having an always on display.
The only way always on displays make sense is when using a technology like OLED where only the area of choice is illuminated. Even then it’s using more power than it would be if it were off. Brightness also has a large impact.
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