In reporting the rumor from its sources on Monday, Taiwanese publication DigiTimes also qualified the information by saying the cost of OLED displays is currently prohibitively high. Nevertheless, it said that sources indicated the next-generation iPad would use an OLED panel.
"Apple reportedly has started development of the second generation iPad using the same design concept as for the iPhone 4G, and will use an OLED panel, according to sources in the component industry," the report said. "Apple is said to be aiming to launch the device in 2011, but a DigiTimes Research senior analyst said the cost of OLED panels are much too high for the iPad."
The report noted that OLED panel prices are expected to drop, which could make the screen display option more viable in time for a new iPad model next year. But it also said that Mingchi Kuo, its senior analyst, is "conservative" about the prospect of an iPad with an OLED panel.
Earlier this month, an analysis of the parts included in the iPad found the current model's LCD screen with IPS technology to be the most expensive component, at an estimated $95. In all, the $499 iPad was said to cost $260 in components.
On the other hand, a 9.7-inch OLED display alone currently costs about $500. Kuo said he doesn't expect that price to drop significantly this year or next.
Last November, DigiTimes incorrectly said that Apple would offer an OLED version of the iPad at a cost of at least $2,000 at retail, due to the high cost of such displays. Most industry watchers at the time believed Apple would charge at least $1,000 for its tablet computer, but the company shocked many in January when it revealed the iPad would start at just $499.
In the hype leading up to the iPad unveiling, numerous rumors suggested Apple could utilize an OLED display in its new hardware. In January, one rumor suggested that Apple had cornered the market on 10-inch OLED displays.
The current iPad LCD screen uses IPS, or in-plane switching, technology. It was developed by Hitachi in 1996, and offers improved viewing angles and color reproductions on screens.