Not only is Apple Inc. falling short on iPad shipments due to hyped up demand decimating its supply, but it has now surfaced that the firm is having trouble getting hold of enough 9.7 inch touchscreens from its Asian suppliers.
Business news outlet, Bloomberg, quotes an analyst from market research firm Isuppli Inc., noting that LG Display, Samsung Electronics and Seiko Epson, Apple’s Asian LCD suppliers, simply can’t keep up with demand, owing to low yields on the particular size of screen Apple needs.
Indeed, the problem is said to be so serious, Isuppli’s analyst deemed it “a production bottleneck,” which could sour Apple’s chances of taking over the tablet market before competitors like Hewlett-Packard Co., Dell Inc., Toshiba Corp. and others start making headway.
The iPad screens use a technology known as in-plane switching (IPS), for what Apple describes as “crisp, clear images and consistent color with an ultra-wide” viewing angle, however, these specialized screens are proving difficult for manufacturers to produce in high volume quickly.
The screens are also disproportionally expensive, compared to the tablet’s other components, with Isuppli estimating that the displays accounted for $95 of the $259.60 it costs Apple to make every iPad. That’s twice as expensive as a regular netbook screen, according to the firm.
Recently, Apple was forced to admit it had had to make the “difficult decision” of delaying its international iPad launch, as U.S. demand put significant constraints on total supply, with over 500,000 of the devices being sold in just the first week of sales.
Indeed, such is the popularity of the tablet, British research outfit, Ovum, believes Apple will ship 13 million iPads by the end of 2011, supply permitting.
Of course, Apple also has to rely on various other component suppliers to make the cogs of its iPad manufacturing machine run smoothly, including Taiwanese firm, Wintek, which makes the touch-aware glass overlay for the displays, as well as Broadcom Corp. and Texas Instruments Inc. which both provide chips instrumental to the touchscreen’s functionality.
Apple refused to comment on the screen shortages, falling back on its previous statement that “demand is far higher than we predicted and will likely continue to exceed our supply over the next several weeks.”
