Posts Tagged ‘supply constraints’

Apple Secures 60% of Touch-Panel Capacity for iPad 2 – Competitors Scramble

One of Apple’s most overlooked strengths is its ability to manage its supply chain, giving it a competitive advantage over rival manufactures. Apple has demonstrated this strength again, reportedly securing 60% of global touch panel capacity, causing supply constraints for other vendors planning to build tablets.

According to Taiwanese website DigiTimes, Apple has secured touch panel capacity to meet demand for iPads in 2011. The websites’ sources claim Apple placed large orders with all of its iPad suppliers and that OEM vendors are having issues meeting demand due to low yield of touch panels.

Sources from tablet PC makers also pointed out that the component shortage is causing their shipment volumes to be unable to catch up with their orders, especially for second-tier players. Touch panels are currently suffering the most serious shortage due to Apple holding control over the capacity of major touch panel makers such as Wintek and TPK, and with US-based RIM, Motorola and Hewlett-Packard (HP) also competing for related components, second-tier players are already out of the game, the sources noted.

DigiTimes’ component supplier sources claim that the shortage is limited to glass capacitive touch panels and that thin-film capacitive touch panels, mainly used in smartphones, are still available. Most tablet manufacturers prefer not to use thin-film panels as they are less durable and don’t have the same touch characteristics as the more widely used glass displays.

Apple’s move to secure such a large portion of the touch-panel capacity has forced other vendors such as HP and Samsung to get their screens from smaller touch-panel suppliers like Sintek Photronic. According to DigiTimes, “Apple’s strategy of taking up most of the capacity should help the company quickly expand its sales, while reducing its competitors’ shipment growth.”

Apple is expected to release the new iPad 2 within the next 60 days and other rumors point to Apple possibly releasing an iPad 3 as soon as this fall. To meet the demand for its new tablets, we wouldn’t be surprised to see Apple secure other component capacity, causing further supply chain issues for its competitors.

» Related posts:

• New Touch Panel Supplier Brought In to Increase iPad Production
• iPad 2 Suppliers to Begin Shipping Components this December
• Camera Lens Supplier for iPad 2 Reportedly Selected

OLED Displays in iPads – Not Before iPad 3

Taiwan-based news outlet DigiTimes once and for all squashed rumors about the potential introduction of OLED screens for the iPad 2: according to a note published in today’s edition, while Apple tried to feature OLED screens in the tablet, major supply constraints and quality-related issues prevented Apple from making the move.

An Active Matrix OLED (AMOLED) display would offer significant advantages to iPad users, namely higher refresh rates, and lower power consumption, when compared to the TFT technology currently used in the iPad. The switch to AMOLED would translate into better battery life and better picture quality at the same time.

OLEDs enable a greater artificial contrast ratio and viewing angle when compared to TFT LCDs, because OLED pixels directly emit light. OLED pixel colors appear correct and unshifted, even as the viewing angle approaches 90 degrees, a feat no TFT screen can achieve today. Also, the amount of power AMOLED displays consume varies significantly depending on the color and brightness shown. For example, an OLED display that consumes 3 watts while showing black text on a white background, will only consume 0.7 watts showing white text on a black background. In comparison, a similar TFT screen will constantly use anywhere between 3 and 5 watts of power.

While OLED offers major benefits, the technology is still far from being mature, and current LCD makers are simply unable to produce enough screens for a mass market device such as the iPad. Moreover, concerns about the lifespan of such screens have been raised over the last years, as OLED screens tend to deteriorate much faster than their TFT counterparts.

Simply put, while the fact that Apple will eventually switch to OLED screens for its iOS line of devices is almost a certainty, the move will not occur before 2012 at the earliest, and the upcoming iPad 2 will feature a TFT screen just like the original iPad. Everything’s not lost though, as the iPad 2 display is expected to offer a higher resolution than the screen currently featured in the iPad.

[Photo Credit: HowStuffWorks]

» Related posts:

• iPad 2 Reported to have LCD Screen Instead of OLED
• More Rumors About the Next Generation iPads
• Touchscreen Production – The Reason for Delays?