Between quality control issues at LG Display that were finally reported as resolved in September, and the ongoing patent litigations between Apple and Samsung, Sharp could become the next display vendor for Apple’s iPads.
When the iPad 2 launched in March, Apple quickly turned to Samsung and Chimei Innnolux as customers complained of light leakage around the bezel of LG-based displays. For much of the year, a combination of quality control issues and late shipments had Apple turning to these other manufacturers to pick up the slack. At the end of August, LG Display finally shipped its due quota of four million panels. The iPad 2 didn’t begin shipping on time until after July. While LG Display expects supply shipments to return to normal, the failures of LG Display to correct its manufacturing issues on time and the untrustworthiness of Samsung would have Apple looking for alternatives. Sharp could be the premium candidate for future iPad displays, such as next year’s rumored Retina Display for the iPad 3.
According the Wall Street Journal, Sharp has reported they’ll begin mass-producing smaller displays at the Kameyama No. 2 plant in Mie Prefecture by the end of the year, a plant previously used solely for the production of TV panels. WSJ reports that Sharp already supplies displays for Apple’s iPhones, and that they could become the premier supplier next year with the introduction of newer models. Apple’s alleged investments in Sharp’s panel manufacturing facilities in Japan lend some additional credence to this claim.
Samsung Chief Operating Officer and President Lee Jae-yong said in October he had discussions with Apple Chief Executive Tim Cook about extending Samsung’s deal to supply parts to Apple through 2013-2014.
Component deals in a competitive market, however, may keep Samsung in the loop. With proof of manufacturing capability and the technology already in place, Samsung is still a critical component of Apple’s supply chain. At the end of the fourth fiscal quarter in September, Apple reported 11.1 million iPads sold compared to 4.2 million iPads sold just a year ago.
Japanese newspaper Nikkan is today reporting that Apple may have made a display component deal with Sharp for the display of the sixth-generation iPhone. It is based on reports that Sharp has begun preparation for the start of manufacturing in Spring next year at its Kameyama plant in Japan for an iPhone display using next-generation technologies.
Sharp will reportedly be producing “low temperature poly-silicon technology” displays, a next generation technology that will allow displays to be thinner and lighter whilst consuming less power than a current LCD display. The key component of these new displays is the polycrystalline silicon, which enables display drivers to be mounted directly onto the glass and thus have a thinner display. Other advantages of the technology include displaying a more vivid image and enhanced durability because of a reduced number of connecting pins.
Previous rumors had circulated that Apple had sided with Toshiba for future display manufacturing – but a Sharp representative disputed this at the time. In a similar vein, Tim Cook commented in January at the Q1 earnings call that Apple had entered a $3.9 billion component supply deal. He didn’t specify what component it was for, but it was speculated that it was for high-resolution displays and that the deal was between Toshiba, Sharp and a third manufacturer. Sharp was also at the center of another display rumor back in January in which they were supposedly preparing to manufacture glasses-free 3D displays for the iPod Touch.
[Nikkan [Google Translate] via AppleInsider]
At Apple’s financial report yesterday there was an interesting revelation by Tim Cook that Apple had recently begun entering agreements with suppliers of key components. The agreement is presumed to be around $3.9 billion dollars and would secure the key strategic resources used in Apple’s products going into the future and there are suggestions it’s for high resolution displays.
As to what components are being secured, Cook didn’t elaborate but did say the deals were similar in nature to the flash memory deals of late 2005. That deal, and subsequent deals around flash memory secured supply for many of Apple’s portable devices including the iPhone and more recently the iPad.