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

Piggie said:

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

I'm hoping others will offer something better personally.

Click to expand...

Yeah, with the remaining available capacity Apple doesn't use, those others will not be able to offer capacitive glass but will be stuck offering thin-film overlays. That will woo the buying public.

And lets agree the suppliers include competitors. Samsung isn't going to go broke giving Apple touchscreens while trying to compete with the Galaxy of other options they have. -RJ

MacRumors said:

This news seems to further indicate that Apple spent its $3.9 billion investment towards securing LCD supply for its future products.

Click to expand...

The DigiTimes article is about glass capacitive touch panels. It has nothing to do with display panels. One is a component that senses touches, the other generates visible pictures.

camelsnot said:

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.

Click to expand...

Apple sources touch panels from multiple manufacturers. And producing one size of panel takes away capacity from other sizes, as the equipment used and staff working on it are mostly the same.

Apple must have a very good resource planner (and a lot of cash)

It's not cheating or monopoly, the companies that produce the touch screens aren't forced to sell all screens to Apple, they only have an agreement on the production plans. If one of these companies decides to double its yearly production the other guys will get their screens (probably not at the same price paid by Apple).

vettori said:

Apple must have a very good resource planner (and a lot of cash)

It's not cheating or monopoly, the companies that produces
the touch screens aren't forced to sell all screens to Apple, they only have an agreement on the production plans. If one of these companies decides to double its yearly production the other guys will get their screens (probably not at the same price paid by Apple).

Click to expand...

They do have a lot of cash. But there was a quote from Apple about the early iPod days, how they planned: "We took the biggest number we could think of, and added 30 percent. And that wasn't enough."

Some of you people are hilarious.

When there were shortages of iPads and delayed rollouts it was Apple being evil deliberately constraining supply for some imagined publicity benefit,as if NOT selling a product increases sales.

Now that they have taken steps to ensure uninterrupted supply by pre-paying(which,as others have said,helps finance increased capacity for all),they are evil for taking away panels from the losers who weren't even interested in this type of device until Apple's came out.

I think we got it-Apple,and not doubt every company on Earth is evil in your eyes not matter what.Very insightful.

You heard it here first....

I get the feeling this week is when we'll see the invites go out for the new iPad announcement event.

At least I keep hoping! LOL! I'm dying to hear some real specs.

beg_ne said:

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.

Click to expand...

There is the possibility that Apple misjudges iPad/iPhone demand and has an excess inventory problem. However, since both products now have a track record, it will merely distill down to a "XX Days Worth of Inventory" type of problem, and it will work itself out.

For example, if Apple were to have the magic touchscreen fairy go "poof!" and deposit 10 million displays in their parking lot this very afternoon, at the iPad's current rates of sales (4Q10 was 4.2 million), that's basically only a 6 month supply - - if iPad sales went utterly flat a month ago. If they're continuing to rise, it is even less.

Thex1138 said:

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

Click to expand...

Having 60% of the supply certainly will make it difficult for various pundit predictors to claim "DOOM!" that the iPad's 2011 market share is going to crash due to Android competition to less than 60%, doesn't it?


-hh

E.Lizardo said:

Some of you people are hilarious.

I think we got it-Apple,and not doubt every company on Earth is evil in your eyes not matter what.Very insightful.

Click to expand...

+1

Seems that there is a group of people here that just automatically think that because a company is profitable they are evil or have evil intent.

Bottom line... Apple is an innovative product company that is also a great business planning company.

E.Lizardo said:

I think we got it-Apple,and not doubt every company on Earth is evil in your eyes not matter what.Very insightful.

Click to expand...

Yep, one of my favorite quotes at work:

"If a situation is ever unclear, assume whatever it would take to drive you into a blind rage."

Mattsasa said:

Wirelessly posted (Mozilla/5.0 (iPhone; U; CPU iPhone OS 4_2_6 like Mac OS X; en-us) AppleWebKit/533.17.9 (KHTML, like Gecko) Version/5.0.2 Mobile/8E200 Safari/6533.18.5)

I think that's cheating

Click to expand...

Totally OT but what are you guys using that generates that annoying "wirelessly posted" header? Is there info in that thing I should care about?

Just askin'....

carnivale said:

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

Click to expand...

NO. Establishing a monopoly would be if Apple were the only company manufacturing touch screens. What they are doing is more like cornering a market, but in this case they actually intend to use the product they purchase as opposed to hold it off the market to drive the value up further. Also, as the demand for touch screens increase, more manufacturing capability will be brought on line to meet the demand, because dem capitolistas sure do luv mak'n money....

Popeye206 said:

+1 Bottom line... Apple is an innovative product company that is also a great business planning company.

Click to expand...

Some would disagree. Sitting on $60B in cash and paying no dividends to shareholders...

Yup, was going to say the same thing; just like the kid down the block who's saved up his pennies instead of blowing it weekly on candy...

Go, Apple!

SeaFox said:

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.

Click to expand...

E.Lizardo said:

Some of you people are hilarious.

When there were shortages of iPads and delayed rollouts it was Apple being evil deliberately constraining supply for some imagined publicity benefit,as if NOT selling a product increases sales.

Now that they have taken steps to ensure uninterrupted supply by pre-paying(which,as others have said,helps finance increased capacity for all),they are evil for taking away panels from the losers who weren't even interested in this type of device until Apple's came out.

I think we got it-Apple,and not doubt every company on Earth is evil in your eyes not matter what.Very insightful.

Click to expand...

++

some people just like to bash Apple - no matter what they are doing. There is no logic or reasoning involved - just blind dump bashing. Apple could give free MacBooks to everyone and they still would getting bashed. Those people have lots of energy in trying to turn everything evil. They will always come up with a funny hypothesis why whatever move Apple does is evil. The only thing you can do is and read and laugh at those unreasonable comments - you can't convince those people of anything else because they don't want to hear anything else.

Mattsasa said:

Wirelessly posted (Mozilla/5.0 (iPhone; U; CPU iPhone OS 4_2_6 like Mac OS X; en-us) AppleWebKit/533.17.9 (KHTML, like Gecko) Version/5.0.2 Mobile/8E200 Safari/6533.18.5)

I think that's cheating

Click to expand...

So what.

Rim is canadian based!

I hate when these writers generalize.

Richard1028 said:

Some would disagree. Sitting on $60B in cash and paying no dividends to shareholders...

Click to expand...

Some would argue that exactly proves they're a great business planning company; that there's actually a reason they're not paying dividends to shareholders? That might be speculative, but it's no less speculative than your assertion.

Besides, that's between Apple and its shareholders and is completely peripheral to this. Apple does not hold their shareholders hostage. If they're not paying out dividends, it's because that's what they've agreed to (as a whole). If any one shareholder isn't happy with it, they can cash the hell out. In stock trading, staying implies consent.

carnivale said:

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

Click to expand...

In this case Apple is a buyer, and not a seller. Nonsensical to use the word monopoly. As far as "establish" monopoly: 60% isn't anywhere close to monopoly, even if it were the unlikely case that 100% of all screens went to tablets and Apple got 60%.

Come on iPad2!!

This is totally legit.

Apple is also taking a business risk by prepaying for all these supplies.

What if they can't sell ipads, what if some better tech comes along, what if we fall into a massive global recession and there is no money. what if world war breaks out?

unlikely so they make a calculated bet and prepay for 60% turning Cash on their balance sheet into an asset of a prepaid expense for LCD's.

Same as airlines buying gasoline futures etc.. You make a calculated business decision and if that plays out you have an efficient supply chain and keep margins in check.

Apple will need more screens because it will sell more tablets. It is good that they were secured for a product that will move off the shelves.

Richard1028 said:

Some would disagree. Sitting on $60B in cash and paying no dividends to shareholders...

Click to expand...

I don't really understand people that keep harping on this. Typically fast growth companies like Apple do not pay dividends because they use their cash as leverage to keep growing profits.

Here is the financial reality:

You can own stock in a company like Exxon that pays a nice dividend but the stock price is rather stagnant. The upside is you know pretty much what your ROI is going to be near term. Or you can own a stock like Apple that pays no dividend but historically pays off much better in stock price appreciation. Investors have a choice.

Now I understand why large mutual and hedge funds that own tens and hundreds of thousands of shares might want in on a small .10 dividend. It looks great on that quarterly report.

----


Now projected sales of 40 million iPads. I guess the haters were correct: The iPad will only be a niche product and flop w/i two years. Netbooks Rulze Da World. Word! Ha. </sarc>

But for the avg investor that has 100 to a few thousand shares (A lot of people bought Apple when it was $10-20 plus it split twice) that .10 is nothing over the potential growth gained by not draining cash to placate institutional shareholders.

Well, there's no rule stopping HP, Motorola and RIM from doing the same thing. Is there?

Thex1138 said:

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

Click to expand...

No, that will also account for iPod Touch and iPhone touch screens.

Mattsasa said:

I think that's cheating

Click to expand...

carnivale said:

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

Click to expand...

It's called planning ahead and there is nothing wrong with that.