Panel Supply Issues to Initially Limit iPad mini Availability

DisplaySearch Senior Analyst Richard Shim comments in a blog release that as DisplaySearch had anticipated, Apple on Tuesday announced additions to its iPad and MacBook Pro lines – the iPad mini, a refreshed iPad with Retina Display, and a 13.3 MacBook Pro notebook.

Shim notes that the $329 iPad mini comes with a 7.9 1024 x 768 display, dual core A5 processor, and up to 10 hours of battery life, while the $499 iPad with Retina Display comes with the same 9.7 2048 x 1536 display as the 3rd-generatin new iPad (which is no longer listed on the Apple website) but features an [“X” version of Apple’s in-house designed] A6 processor, and up to 10 hours of battery life. The iPads can be pre-ordered on October 26 and ship on November 2.

The $1,699 MacBook Pro with Retina Display features a 13.3 2560 x 1600 screen and is already available.

“As is typical,” says Mr. Shim, “we expect the iPads to be supply constrained initially, especially the iPad mini with its $329 price. The new low price point is expected to appeal to a wider audience and drive up demand. However, panel supply chain indications point to an even more than typical tightness in the market for the iPad mini.”

Shim notes that Apple is expanding its supplier base with new partners for the iPad mini, continuing to work with LG Display which is supplying panels to Foxconn for the finished product, and adding AUO, which will supply panels to Pegatron.

However, he reports that AUO is having yield issues with the 7.9 panel which is limiting their supply to Pegatron, and in September, AUO shipped just over 100,000 units. The production plan is reach 400,000 units in October, 800,000 units November and 1 million in December. LG Display shipped 300,000 panels in September, and plans to ship 1 million in October, 2.5 million in November, and 3 million in December.

Mr. Shim also observes that Samsung has been one of the leading panel suppliers for the iPad, and in fact when the new iPad was first released, Samsung was the only supplier that could meet production orders, with LG Display gradually ramping up to meet demand. However, he notes that Samsung and Apple appear to be winding down their relationship most likely due to the legal conflicts the two have been embroiled in recently. In previous iPad launches, LG Display and Samsung have been the main panel suppliers with roughly equal panel production.


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