February 18th, 2011

Apple’s 60% Lock on Touch Panels Pinches Rivals’ Supply

Internet News, by Albel.

Apple reportedly has 60 percent of touch panel components under contract, potentially resulting in a “tight supply” for rivals of the Cupertino, Calif. firm’s iPad. As a result, companies such as HP, Research in Motion and HP are muscling out “second-tier” tech firms and prompting a potential 2011 shortage of glass capacitive touch panels for the tablet PC industry.

Hoping to not repeat slow iPad sales due to tight supplies, Apple is taking a new strategy to guarantee the parts are available to meet demand. “In 2011, Apple’s strategy of taking up most of the capacity should help the company quickly expand its sales, while reducing its competitors’ shipment growth,” writes industry publication DigiTimes.

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In January, Apple Chief Operating Officer Tim Cook revealed the tech giant had quietly invested $3.9 billion in retooling component manufacturing plants. Although Cook refused to say which component Apple was interested in ensuring is available, Morgan Stanley analyst Katy Huberty speculated the cash could purchase 60 million iPad touch panels, or 136 million iPhone touch displays.

This would not be the first time Apple has been accused of prompting a component crunch. In 2005, the Cupertino, Calif. firm prepaid for flash memory supplies destined for devices such as the iPhone and MacBook Air.

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