Apple Buying Up Touch Screens with Over 60% of Global Supply in 2011

[MacRumors]

Digitimes reports that Apple has secured nearly 60% of the global touch panel capacity of 2011 in order to fulfill its internal goals of shipping 40 million iPads this year.

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.

So called "second tier" players are seemingly unable to obtain supply due to the high demand from Apple and other companies.

Apple had previously revealed that they had prepaied $3.9 billion to three companies in order to guarantee long term supply of a certain component, but stopped short of revealing which one. This news seems to further indicate that Apple spent its $3.9 billion investment towards securing LCD supply for its future products.

Article Link: Apple Buying Up Touch Screens with Over 60% of Global Supply in 2011

 

[CFreymarc]

Good time for commodity brokers. Those two year old screen stock are going to sell at 10x to 100x this summer to make the Christmas season builds -- woohoo!

 

[talkingfuture]

Looks like a good time to be in the screen manufacturing business.

 

[Full of Win]

Interesting way to suck to oxygen out of the up-and-coming Android tablet market.... make the components hard to get by buying them up en masse.

 

[beg_ne]

Interesting way to suck to oxygen out of the up-and-coming Android tablet market.... make the components hard to get by buying them up en masse.

Hah, you make it sound so nefarious. Apple will put the screens to good use though, they won't be hidden away in some warehouse somewhere just to stunt android growth.

 

[wesrk]

Roll out the iPad 2, my cc is ready!

 

[Mattsasa]

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I think that's cheating

 

[ArchaicRevival]

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I think that's cheating

That's actually called Capitalism.

 

[batchtaster]

I think that's cheating

That's not anywhere near cheating.

due to the high demand from Apple and other companies.

Apple needs them, because the demand for their products is that high. They're not just trying to edge out their competition.

At Café Touché la Screene, Apple just called ahead, reserved a table and pre-paid for their meal. And they've got the pockets to be able to do so. It's not like they're just sitting at the table all night, not ordering, not drinking and taking up all the bathroom stalls for no good reason. Everybody else who just spontaneously wandered up without any fore-thought needs to wait at the bar until Apple (and several other parties) are done and the maître d' comes to get them.

 

[JasperJanssen]

To be more realistic, they have to wait until the restaurant has built an annexe to its kitchen & dining room, or converted the nearby McDonalds to Posh Restaurant status. And of course, it's possible that the McD franchisee could start a clone business -- Coffeehouse Touchscreen -- that's much cheaper but nearly as good.

 

[Stridder44]

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I think that's cheating

It's called spending $3.9 billion to ensure you don't get screwed later on. Any other major company could have done it too (and probably have). It's not cheating, it's called being resourceful.

Interesting way to suck to oxygen out of the up-and-coming Android tablet market.... make the components hard to get by buying them up en masse.

You don't seriously think that's what's going on here do you?

 

[Thex1138]

So perhaps

Apple consume 60+% of the touch screen panel supplies...
Apple foresee selling at least 60% of all tablets (produced in 2011?) in the market...
And new models? Not just iPad 2

 

[SeaFox]

It's called spending $3.9 billion to ensure you don't get screwed later on. Any other major company could have done it too (and probably have).

No they couldn't. Apple pre-paid for those displays, because they had the insight to save money so they had the bank to spend. Whereas other companies tend to operate in a state of constant debt to others. And people thought Apple was just wasting money by holding onto it instead of giving it to the shareholders as dividends or making more corporate acquisitions.

"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."

Boo-Hoo. Maybe they should be investing in LCD manufacturering companies if they don't like these constant shortages. I mean, it's not like they don't already have customers waiting to order them and the demand of displays is going to go down or anything.

 

[0815]

Looks like a smart investment of their pile of cash.

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I think that's cheating

Why is it cheating if a company collects a pile of cash over time and than makes a strategic investment to secure sufficient supply for their products? If they would buy all the market supply and just throw it away, than it might be a different story (would be still legal, but evil) - but they put the displays at good use and they have to make sure that they get enough parts for their products. If other companies can't effort this or just sleept through it without realizing the need, well, sucks for those companies, not Apples fault. Maybe other companies should start having their own vision and plan ahead instead of following others and start whining. Thats how free market / capitalism works.

 

[carnivale]

That's actually called Capitalism.

To be more precise, it's called establishing a monopoly.

 

[wovel]

To be more precise, it's called establishing a monopoly.

Does not seem particularly precise to me. The only way it is a monopoly is if you consider the iPad an entirely unique product.

iPad sales were constrained in 2010 because manufacturers were unable to meet demand. Apple decided they did not ant that to happen again and made investments with each one to help them ramp up production to meet their needs. Being the only competent company in a market does not mean you have a monopoly, it just means everyone else makes overpriced junk.

 

[wisty]

The money they paid will get used (in part) by the suppliers who want to build extra capacity, and don't want to go to the banks for a loan. Meaning more screens for everyone (especially Apple).

 

[scottness]

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It seems they've learned their lesson from the previous shortages. Good move.

 

[camelsnot]

really a silly article. Apple is only buying the specific model of touch screen it needs to fulfill its designs. This has nothing to do with other vendors who are using screens from other manufacturers and/or at different sizes. I love how Apple media twist a story around to boost the lovin'.

 

[Thunderhawks]

really a silly article. Apple is only buying the specific model of touch screen it needs to fulfill its designs. This has nothing to do with other vendors who are using screens from other manufacturers and/or at different sizes. I love how Apple media twist a story around to boost the lovin'.

Twisted would mean that this is not true or they were trying to hide something negative and needed a spin.

And, how would YOU know if they don't need other sizes?

FACT is that Apple did something smart and secured it's supplies. They need these numbers to sell their products.

All copy cats go to the back of the line!

 

[Popeye206]

Funny that Apple can be smart about business and their supply needs and a few here automatically make it an evil thing.

Smart move by Apple.

 

[0815]

Funny that Apple can be smart about business and their supply needs and a few here automatically make it an evil thing.

Smart move by Apple.

Agreed - Apple makes a smart investment for future products and all the fans of [name any none-apple company here] call it 'evil' because their favorite company slept and didn't plan ahead and invested in what they need.

 

[Piggie]

Great, so Apple has the monopoly on low resolution touch screens.

I'm hoping others will offer something better personally.

 

[tigres]

No soup for you.

 

[batchtaster]

To be more precise, it's called establishing a monopoly.

Great, so Apple has the monopoly on low resolution touch screens.

I don't think you know what a monopoly actually is. But it's fun to use polarizing words, isn't it.

To be more realistic, they have to wait until the restaurant has built an annexe to its kitchen & dining room

Um, no. To be more accurate, Apple not just pre-booked and pre-paid their meals, they paid for the restaurant to add an extension to the building just for their party. Apple didn't just buy the panels, they dumped money into the component companies so that those suppliers could increase their production to meet their needs.

If other companies can't, won't or didn't think to make special arrangements to have extra production put on to meet their needs, then they go through the normal supply, like everybody else.

Apple didn't just absorb all the production. Their investment allowed worldwide production to increase. Worldwide demand is increasing, it's not just Apple wanting more. Something you "monopoly" people might want to remember.