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  • Apple Devouring 60% of World Touchscreen Supply


    According to upstream component manufacturers in China, Apple has already placed orders for approximately 60 percent of the world's touch panel supply, setting the stage for major shortages in 2011. The report from DigiTimes says that this strategy will allow Apple to boost its sales in the coming year while simultaneously starving its competitors of supplies.

    Manufacturers are telling DigiTimes that Apple has reserved most of the production capacity of glass capacitive touch panels - like those found on the iPad - from two major suppliers, Wintek and TPK. This is causing RIM, Motorola and Hewlett-Packard to survive on whatever Apple leaves them, and forcing smaller "second-tier" manufacturers to do without. Some, like Samsung and Acer, are going with smaller suppliers, while others have to make do with TFT capacitive panels: basically larger versions of the screens used on some Android phones.

    Apple COO Tim Cook told investors in January that the company had committed $3.9 billion to long-term component contracts. At the time, Morgan Stanley analyst Katy Huberty noted that this amount of money would buy 60 million iPad displays, or 136 million iPhone touchscreens. This latest report is yet another piece of evidence that this is exactly what they've done. With other tablets just entering the market this year, the supply bottleneck means that competitors will have a hard time finding a foothold, almost guaranteeing Apple's continued dominance in a market they already control 95% of.

    Apple's played this kind of hardball in the past: in 2005, they caused a worldwide shortage of NAND flash memory when they bought up 40% of Samsung's entire supply of 4 GB chips. That year, iPod sales surged with the introduction of the iPod nano, which was significantly cheaper than other flash-based media players at the time.

    Source: AppleInsider
    This article was originally published in forum thread: Apple Devouring 60% of World Touchscreen Supply started by Paul Daniel Ash View original post
    Comments 51 Comments
    1. edwilk55's Avatar
      edwilk55 -
      Leave not on the table that they may simply wish to guarantee a good supply of a far superior product to a wanting market. *shruggs*
    1. ohthatguyagain's Avatar
      ohthatguyagain -
      Quote Originally Posted by Zokunei View Post
      Isn't that "monopolizing the market" or something?
      No. This is a very commonly used business strategy called non-hostile vertical integration. Instead of buying out all the organizations that manufacture and gather the necessary materials for your product, you let the organizations stand by controlling at least 51% of their interest.
      Also known as the controlling customer concept, this strategy has been used throughout modern history. It is often used as a means for an organization to become a mid-level supplier. In this instance, however, it is a business tactic aimed at showing investors the robust confidence apple has in it's future and forthcoming success while securing their position of dominance in this area of technology.
    1. Lombardo Joe's Avatar
      Lombardo Joe -
      Barney the Dinosaur could have bought %60 of the displays. If anything this is better for me as a consumer of Apple products.
    1. nutz's Avatar
      nutz -
      Quote Originally Posted by Go Gators View Post
      Now that there is real competition coming Apple's way, this is how they deal with it. Rather than making a better product and removing all of their stupid restrictions so more people would want to buy their idevices, they're choosing to double down with their arrogance and force people to buy Apple because the much better Android products will be out of stock. Typical Apple BS that a lot of people are starting to get real sick of.
      Agreed, but this lot of people starting to get sick sure will be the ones shelling out more dough to keep the (hopefully more evolved) alternatives alive.
      To Apple figure$ they won't make much of a ripple on the enormous mass-marketshare iOS is going to gain with this tactic.

      And as mentioned in other posts, this is most surely good for the entire market, from the component producers, to technological innovations, and ultimately for the consumers.
    1. cocoabean772's Avatar
      cocoabean772 -
      Lmao
    1. steve-z17's Avatar
      steve-z17 -
      Quote Originally Posted by sziklassy View Post
      I am not sure this can be called a monolpoly. They paid for x number of displays, and will be receiving x number. If that number happens to be 60% of what can be produced, so be it. Unless I am reading this wrong, they aren't specifically doing this to try and block competition, which is what an antitrust issue ACTUALLY is...
      Exactly. Apple pre-paid for all the displays so they could save money, it's a very smart move! They weren't trying to beat down the competition at all, they were just planning ahead. Good job Apple
    1. otisg's Avatar
      otisg -
      have to agree with a lot of the responses. quite a smart business move on apple's end. i'm sure had the other companies had the opportunity they would've done the same thing. i just hope the competition steps up and creates innovative new products to compete with apples' products, this will be better for the consumers!
    1. MetallicaFan1991's Avatar
      MetallicaFan1991 -
      Quote Originally Posted by Snozberries View Post
      1. = NOM NOM NOM!!
      2. = Securing your future linked with evolving technology

      +2 Apple
      -2 Samsung, Acer, Motorola, RIM and HP!!
      I doubt Samsung care, they already make touch panels for themselves and they make SAMOLED touch panels which are by far the best touch screens right now.
      Its other manufacturers that should be worried.
    1. Captinsmooth's Avatar
      Captinsmooth -
      I don't think Samasung has to worry, they have a pretty large stake in Idevices already. Considering they provide quite the few integrated circuits to apple, that means every Idevice sold is more money in samasungs pockets as well.
    1. alexevo's Avatar
      alexevo -
      Correct me if I'm wrong but doesn't Samsung make "screens" I.e. LCD and led not the actual glass touch panel? I've always seen these parts sold separately so I am under the impression that they aren't the same component.

      If that is the case then samsung would definitely have to be worried about this shortage soon to come.
    1. Captinsmooth's Avatar
      Captinsmooth -
      Quote Originally Posted by alexevo View Post
      Correct me if I'm wrong but doesn't Samsung make "screens" I.e. LCD and led not the actual glass touch panel? I've always seen these parts sold separately so I am under the impression that they aren't the same component.

      If that is the case then samsung would definitely have to be worried about this shortage soon to come.
      You are correct they are different components. As far as knowing if samsung makes capacitive touch screens I am not sure. I am pretty sure that current samsung phones use a resistive based touchscreens and not capacitive.
    1. Ochocinco's Avatar
      Ochocinco -
      hahahahaha damn apple is evil but smart
    1. jOnGarrett's Avatar
      jOnGarrett -
      Quote Originally Posted by Zokunei View Post
      Isn't that "monopolizing the market" or something?
      its childish, and makes apple look like a jealous bully. apple is a company that hates consumers and hates competition.

      what a lousy strategy for dealing with competition. in the end, its the users, the consumers who suffer.

      I hate apple and I do not plan on buying any more of their products after the contract expires on my iphone 4's.

      Ive already decided on getting the Samsung Galaxy 10.1 and Im so glad that the ipad 2 is already D.O.A !!
    1. MetallicaFan1991's Avatar
      MetallicaFan1991 -
      Quote Originally Posted by Captinsmooth View Post
      You are correct they are different components. As far as knowing if samsung makes capacitive touch screens I am not sure. I am pretty sure that current samsung phones use a resistive based touchscreens and not capacitive.
      Fail. Samsung use capacitive SAMOLED screens in there high end Android phones. The AMOLED screen has a built in touchscreen unlike LCD where it's layered. That's how they've achieved a super thin Galaxy S2. Wont be long before Apple have to remove the thinnest smartphone in the world ad.
    1. NSXrebel's Avatar
      NSXrebel -
      Quote Originally Posted by jOnGarrett View Post
      its childish, and makes apple look like a jealous bully. apple is a company that hates consumers and hates competition.

      what a lousy strategy for dealing with competition. in the end, its the users, the consumers who suffer.

      I hate apple and I do not plan on buying any more of their products after the contract expires on my iphone 4's.

      Ive already decided on getting the Samsung Galaxy 10.1 and Im so glad that the ipad 2 is already D.O.A !!
      whaaaa!
    1. Co1d Night's Avatar
      Co1d Night -
      It becomes monopolizing to a certain extent. If it continues for the next few years then *maybe* it might become monopolizing. But theres too many conditions to tell if its REALLY monopolizing.

      One side can say "It's monopolizing because it takes 60% of the touchscreen production to feed apple's need for touchscreens, which leaves little for other companies to order forcing them to delay production".


      The other side can say "Its not monopolizing because its not apples fault that their products are more popular than other companies which requires them to make more products".


      You cant really tell, its personal opinion. Mine? as i said above, its monopolizing to a certain extent.
    1. STM127's Avatar
      STM127 -
      Quote Originally Posted by jOnGarrett View Post
      its childish, and makes apple look like a jealous bully. apple is a company that hates consumers and hates competition.

      what a lousy strategy for dealing with competition. in the end, its the users, the consumers who suffer.

      I hate apple and I do not plan on buying any more of their products after the contract expires on my iphone 4's.

      Ive already decided on getting the Samsung Galaxy 10.1 and Im so glad that the ipad 2 is already D.O.A !!
      I believe you are uneducated.
    1. Co1d Night's Avatar
      Co1d Night -
      Quote Originally Posted by jOnGarrett View Post
      its childish, and makes apple look like a jealous bully. apple is a company that hates consumers and hates competition.

      what a lousy strategy for dealing with competition. in the end, its the users, the consumers who suffer.

      I hate apple and I do not plan on buying any more of their products after the contract expires on my iphone 4's.

      Ive already decided on getting the Samsung Galaxy 10.1 and Im so glad that the ipad 2 is already D.O.A !!
      Then why are you here if you hate apple? this IS a site for apple products you know.

      Go find a microsoft forum site
    1. Zokunei's Avatar
      Zokunei -
      Quote Originally Posted by Th3_Amazing_Ath3ist View Post
      Then why are you here if you hate apple? this IS a site for apple products you know.

      Go find a microsoft forum site
      Or Google forums.
    1. mustard05's Avatar
      mustard05 -
      Quote Originally Posted by STM127 View Post
      I believe you are uneducated.
      I agree with you 100%.