or Connect
AppleInsider › Forums › Mobile › iPad › With 60% of world's touch panel capacity, Apple squeezes competitors
New Posts  All Forums:Forum Nav:

With 60% of world's touch panel capacity, Apple squeezes competitors

post #1 of 59
Thread Starter 
Apple has reportedly locked up 60 percent of the world's touch panel capacity, which has led to "tight supply" among competitors hoping to take on the iPad.

According to DigiTimes, Apple is expected to cause an industry-wide component shortage in 2011, which is causing issues among tablet PC makers. The most serious shortage has reportedly occurred with touch panels, as Apple holds the majority of capacity from major suppliers Wintek and TPK.

Major companies Research in Motion, Motorola and Hewlett-Packard are said to be competing for related components with Apple, pushing "second-tier players" out of the market entirely. Specifically, glass capacitive touch panels, like the one found on the iPad, are the most constrained component.

"Sources from iPad distributors pointed out that in 2010, Apple's order forecasts to its OEM partners were all high and the biggest problem on the supply side was not capacity, but low yields of touch panels," the report said. "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."

Apple Chief Operating Officer Tim Cook revealed in January that his company committed $3.9 billion to secret long-term component contracts. The company would not reveal what the money was put toward, citing a competitive disadvantage in doing so, but it has been widely speculated that the money has been put toward LCD screens and touch panels for devices like the iPhone and iPad.

Analyst Katy Huberty of Morgan Stanley said the investment could allow Apple to buy 60 million iPad touch panels, or 136 million touch displays for the iPhone.

Apple's secret investment is similar to 2005, when the company prepaid for NAND flash memory, allowing it to leverage pricing and garner supply for devices like the iPhone, iPad and new MacBook Air. Much like the anticipated control over the touch panel market in 2011, at numerous points in the past Apple caused a shortage of NAND flash, leaving competitors out while products like the iPhone dominated components.
post #2 of 59
Smart move by Apple, and they're obviously putting their enormous surplus of built up cash to good use.

Touch panels are a hot item now, and it's kind of hard for competitors to compete if there aren't enough screens being made to meet the demand and you happen to have first dibs on most of them.

Maybe that's why many of the competitors are coming out with those awful smaller sized tablets which fit somewhere between a smartphone and a real tablet.

post #3 of 59
good business to produce and sell touch screens for these years...
sent from my... internet browser of choice.
Reply
sent from my... internet browser of choice.
Reply
post #4 of 59
...and Apple will sell each and every one of them.
post #5 of 59
Articles like this are why I laugh at Android fanboys so often. Apple makes such a profit on their products and they're always a year or two ahead and moves like this just keep them in the lead until they innovate again and leave everyone else scrambling to catch up.
post #6 of 59
So where are the posters that want Apple to give all their cash holdings back to the shareholders with a huge tax fee thus reducing the stock value doubly with only a little, short-term benefit to the shareholder, instead of investing in longterm component acquisitions that can put them a step ahead of their competitors as needed while still being able to turn out a healthy profit? I feel bad for the people that have no sense of savings.
post #7 of 59
The company that comes up with an alternative technology for touch screens other than LCD could do very well round about now!
From Apple ][ - to new Mac Pro I've used them all.
Long on AAPL so biased
"Google doesn't sell you anything, they just sell you!"
Reply
From Apple ][ - to new Mac Pro I've used them all.
Long on AAPL so biased
"Google doesn't sell you anything, they just sell you!"
Reply
post #8 of 59
Quote:
Originally Posted by digitalclips View Post

The company that comes up with an alternative technology for touch screens other than LCD could do very well round about now!

Just make sure they started work on it 10 years ago.
post #9 of 59
Quote:
Originally Posted by Logisticaldron View Post

So where are the posters that want Apple to give all their cash holdings back to the shareholders with a huge tax fee thus reducing the stock value doubly with only a little, short-term benefit to the shareholder, instead of investing in longterm component acquisitions that can put them a step ahead of their competitors as needed while still being able to turn out a healthy profit? I feel bad for the people that have no sense of savings.

While $3.9B to secure supplies is pretty substantial, Apple is sitting on a much larger pool of short-term assets domestically. They've been talking about potential acquisitions for years as if they are stockpiling for some big buyout yet most of Apple's acquisitions have been relatively small. So, yes, a case can still be made for them to do something else with the money, not to mention that it is earning a ridiculous low return of something like 1%. With inflation at around 2.00-2.50% this year, that stockpile has essentially lost value. At least go buy something else. Apple established a Nevada-based investment firm specifically to manage the investment of that horde; I don't understand why the best they can do is barely better than a bank savings account.
post #10 of 59
B.S. -- the problem other tablet makers have is that nobody wants their products. Not that they can't make enough of them.
15" G4 Powerbook, 13" White Macbook, Apple TV 2g, iPod Touch 2g
Reply
15" G4 Powerbook, 13" White Macbook, Apple TV 2g, iPod Touch 2g
Reply
post #11 of 59
Quote:
Originally Posted by KingKuei View Post

While $3.9B to secure supplies is pretty substantial, Apple is sitting on a much larger pool of short-term assets domestically. They've been talking about potential acquisitions for years as if they are stockpiling for some big buyout yet most of Apple's acquisitions have been relatively small. So, yes, a case can still be made for them to do something else with the money, not to mention that it is earning a ridiculous low return of something like 1%. With inflation at around 2.00-2.50% this year, that stockpile has essentially lost value. At least go buy something else. Apple established a Nevada-based investment firm specifically to manage the investment of that horde; I don't understand why the best they can do is barely better than a bank savings account.

Agreed. Here in the UK my savings are getting about 3% and my pension about 7%, so you'd have thought a big company could get much more...
post #12 of 59
Quote:
Originally Posted by KingKuei View Post

While $3.9B to secure supplies is pretty substantial, Apple is sitting on a much larger pool of short-term assets domestically.

How much domestically vs overseas? I'm guessing that the $3.9B is spent from their overseas pool of money.
post #13 of 59
Why not just spend about $4 billion and take the entire supply of screens?
post #14 of 59
Quote:
Originally Posted by eAi View Post

Agreed. Here in the UK my savings are getting about 3% and my pension about 7%, so you'd have thought a big company could get much more...

The more money you have in a savings account the lower the interest rate.

Apple may just have conservative views on how to invest their money.
Hard-Core.
Reply
Hard-Core.
Reply
post #15 of 59
Quote:
Originally Posted by mdriftmeyer View Post

Just make sure they started work on it 10 years ago.

Quote:
Originally Posted by nht View Post

How much domestically vs overseas? I'm guessing that the $3.9B is spent from their overseas pool of money.

From what I gather from the 10-Q, nearly HALF of the $55B position is in short-term (fairly liquid) holdings. Thats just a single country (USA). Hope they got big plans for it already. Hope they have their eye on something they're not telling us about. Perhaps Steve wants to enrage Bill Gates by buying out MSFT. Or Dell... And upon purchase, he will just liquidate the company and give all the money back to the shareholders. Muahahahahahaha
post #16 of 59
Quote:
Originally Posted by Logisticaldron View Post

So where are the posters that want Apple to give all their cash holdings back to the shareholders with a huge tax fee thus reducing the stock value doubly with only a little, short-term benefit to the shareholder, instead of investing in longterm component acquisitions that can put them a step ahead of their competitors as needed while still being able to turn out a healthy profit? I feel bad for the people that have no sense of savings.

Exactly - its those manipulating unethical POS institutional investors that have been manipulating Apple's stock and shouting at apple the loudest to give their incredible cash hoard out as dividends so that these investors can have a big pay day for doing nothing. This, my friends, is what you can do with a huge pile of cash - use it as a competitive advantage. Apple - brilliant. Institutional investors - not so much.
post #17 of 59
Quote:
Originally Posted by KingKuei View Post

While $3.9B to secure supplies is pretty substantial, Apple is sitting on a much larger pool of short-term assets domestically. They've been talking about potential acquisitions for years as if they are stockpiling for some big buyout yet most of Apple's acquisitions have been relatively small. So, yes, a case can still be made for them to do something else with the money, not to mention that it is earning a ridiculous low return of something like 1%. With inflation at around 2.00-2.50% this year, that stockpile has essentially lost value. At least go buy something else. Apple established a Nevada-based investment firm specifically to manage the investment of that horde; I don't understand why the best they can do is barely better than a bank savings account.

Apple has been a starving child with it's hands held open for money before, there is no chance in hell the board of directors will ever make a purchase big enough to deplete cash reserves, I just cannot see it happening.
post #18 of 59
Quote:
Originally Posted by deuxlavabo View Post

B.S. -- the problem other tablet makers have is that nobody wants their products. Not that they can't make enough of them.

HP had their demand met quite nicely for the sale of their Slate last year - of course it is not too difficult to come up with ~9000 screens I guess.
post #19 of 59
Quote:
Originally Posted by Apple ][ View Post

Smart move by Apple, and they're obviously putting their enormous surplus of built up cash to good use.

What? They didn't do anything with the cash.
Apple did not pay cash up front.
They signed an agreement/contract for $3.9 billion.
post #20 of 59
So they want components to build products. Why make it sound like it is some sort of agenda to take down other companies?
post #21 of 59
Quote:
Originally Posted by FreeRange View Post

Exactly - its those manipulating unethical POS institutional investors that have been manipulating Apple's stock and shouting at apple the loudest to give their incredible cash hoard out as dividends so that these investors can have a big pay day for doing nothing. This, my friends, is what you can do with a huge pile of cash - use it as a competitive advantage. Apple - brilliant. Institutional investors - not so much.

Right. Apple is quickly becoming an essential part of our economy too. iPads and Macs are quickly being adopted in mission critical tasks. I would prefer that they left most of their cash alone for stability. We don't need another late 90s incident. Apple may one day be in a situation where they need to catch up and need cash to do it. Fortunately for Apple, nobody else has the cash (and brains) to do what it takes to create a real competitor.
post #22 of 59
Quote:
Originally Posted by aplnub View Post

The more money you have in a savings account the lower the interest rate.

Apple may just have conservative views on how to invest their money.

You mean how to invest MY money, right?
post #23 of 59
Quote:
Originally Posted by Logisticaldron View Post

So where are the posters that want Apple to give all their cash holdings back to the shareholders with a huge tax fee thus reducing the stock value doubly with only a little, short-term benefit to the shareholder, instead of investing in longterm component acquisitions that can put them a step ahead of their competitors as needed while still being able to turn out a healthy profit? I feel bad for the people that have no sense of savings.

Uh... You realize that they have about $60 billion, right? They could give back half of that and still have $30 billion which I THINK would still be just enough to cover the $4 billion.

And to the poster suggesting that since Apple once almost went bankrupt, that therefore an infinite desire to hold cash is reasonable? Very sad.
post #24 of 59
Quote:
Originally Posted by cameronj View Post

Uh... You realize that they have about $60 billion, right? They could give back half of that and still have $30 billion which I THINK would still be just enough to cover the $4 billion.

And to the poster suggesting that since Apple once almost went bankrupt, that therefore an infinite desire to hold cash is reasonable? Very sad.

Uh You realize that over50% are long term investments and overseas.
Uh You realize that one component buy up for a year does not a complete device make.
Uh You realize that spending 10%, 20%, 50% or 100% of your savings just because you have it isnt a sound idea for any investor, whether it be an individual or company.

Do you give away 50% of your savings simply because you make more than you spend? Of course not. In fact, its those that look at $60 billion and see a figure too high to comprehend that probably dont have more than 4 figures in their cash holdings.

Were talking $4 billion for one component for one year. Do you really think that is the only component or that they wont have to increase their investments for each component each year to meet increased demands? What about R&D so they can stay ahead in the game? Thinking itll be smooth sailing for Apple forever and ever and ever is how people fail businesses.

The future isnt certain is the only certainty you can know. For this reason you need to plan for which you can not plan. One way to do that is to keep healthy cash reserves.

Read this article and you might get a clue as to why importing $30 billion back to the US just to give to stockholders is a follish notion: http://arstechnica.com/apple/guides/...-look-big.ars/
post #25 of 59
Quote:
Originally Posted by cameronj View Post


And to the poster suggesting that since Apple once almost went bankrupt, that therefore an infinite desire to hold cash is reasonable? Very sad.

To someone in their sixties or seventies, twenty or thirty years of saving is not infinity. It's prudence. A quality in short supply in an era of get-rich-quick business ethics.
A.k.a. AppleHead on other forums.
Reply
A.k.a. AppleHead on other forums.
Reply
post #26 of 59
Partial quote only

Quote:
Originally Posted by Logisticaldron View Post


Read this article and you might get a clue as to why importing $30 billion back to the US just to give to stockholders is a follish notion: http://arstechnica.com/apple/guides/...-look-big.ars/

Thanks for this link, a really good read and for once very easy to follow.
From Apple ][ - to new Mac Pro I've used them all.
Long on AAPL so biased
"Google doesn't sell you anything, they just sell you!"
Reply
From Apple ][ - to new Mac Pro I've used them all.
Long on AAPL so biased
"Google doesn't sell you anything, they just sell you!"
Reply
post #27 of 59
deleted
post #28 of 59
Quote:
Originally Posted by KingKuei View Post

From what I gather from the 10-Q, nearly HALF of the $55B position is in short-term (fairly liquid) holdings. Thats just a single country (USA). Hope they got big plans for it already. Hope they have their eye on something they're not telling us about. Perhaps Steve wants to enrage Bill Gates by buying out MSFT. Or Dell... And upon purchase, he will just liquidate the company and give all the money back to the shareholders. Muahahahahahaha

Nah! Apple will buy IBM, then release a PHP -- A PHP is like a PGP, but it is you who are being played!

jejejejeje
"Swift generally gets you to the right way much quicker." - auxio -

"The perfect [birth]day -- A little playtime, a good poop, and a long nap." - Tomato Greeting Cards -
Reply
"Swift generally gets you to the right way much quicker." - auxio -

"The perfect [birth]day -- A little playtime, a good poop, and a long nap." - Tomato Greeting Cards -
Reply
post #29 of 59
Quote:
Originally Posted by MacRulez View Post

Posts like that make Android users laugh. Stop and think about where that profit comes from....

Why can't Apple fans simply enjoy their products without devoting so much energy to dissing others?
Is the product experience itself that uninteresting?

Maybe it's because we were the butt end of the "dissing" for almost twenty years by the PC crowd. They were the ones laughing at Mac users while continually starting the "Apple death spiral clock" over and over again. Maybe it's because Windows and Android fans (who seem to prefer anything that isn't Apple) continue to this day to mock Apple and its loyal customers. We're called lemmings, sheeple, kool-aid drinkers, Steve Jobs sycophants. Yet we're not allowed to do a little gloating now that Apple is the 800lb gorilla in the room? Think again. \
post #30 of 59
Quote:
Originally Posted by lkrupp View Post

Maybe it's because we were the butt end of the "dissing" for almost twenty years by the PC crowd. They were the ones laughing at Mac users while continually starting the "Apple death spiral clock" over and over again. Maybe it's because Windows and Android fans (who seem to prefer anything that isn't Apple) continue to this day to mock Apple and its loyal customers. We're called lemmings, sheeple, kool-aid drinkers, Steve Jobs sycophants. Yet we're not allowed to do a little gloating now that Apple is the 800lb gorilla in the room? Think again. \

It's all in good fun.

Proud AAPL stock owner.

 

GOA

Reply

Proud AAPL stock owner.

 

GOA

Reply
post #31 of 59
deleted
post #32 of 59
Quote:
Originally Posted by MacRulez View Post

Posts like that make Android users laugh. Stop and think about where that profit comes from....

Why can't Apple fans simply enjoy their products without devoting so much energy to dissing others?
Is the product experience itself that uninteresting?

The profit comes from being an innovator who sells compelling new products directly to satisfied customers rather than dumping low-margin inferior copies into sales channels. Any other questions?

This is an Apple website where people take the occasional potshot at other companies. If you want to see non-stop 24/7 irrational anti-Apple raving go to any other tech website.
post #33 of 59
Quote:
Originally Posted by digitalclips View Post

The company that comes up with an alternative technology for touch screens other than LCD could do very well round about now!

Quote:
Originally Posted by mdriftmeyer View Post

Just make sure they started work on it 10 years ago.

You mean like Samsung with Super AMOLED?

This article is hugely misleading. Samsung has no problems sourcing touchscreens.
post #34 of 59
deleted
post #35 of 59
Apple is actually doing its competition a favor: Its constraining the number of products they can build that nobody wants to buy.

Quote:
Originally Posted by Logisticaldron View Post

Uh You realize that spending 10%, 20%, 50% or 100% of your savings just because you have it isnt a sound idea for any investor, whether it be an individual or company.

Do you give away 50% of your savings simply because you make more than you spend?

Its amazing how many people would. Ive known people who do that, and when they lose their jobs, they just keep right on spending anyhow. Its made me less charitable. It used to be people who needed charity were really in trouble through no fault of their own. Nowadays, its more likely to be because of financial foolishness.


Quote:
Originally Posted by Robin Huber View Post

To someone in their sixties or seventies, twenty or thirty years of saving is not infinity. It's prudence. A quality in short supply in an era of get-rich-quick business ethics.

The under-45 crowd today doesnt understand thrift (i.e. how to live on a budget). That is largely because they have a hard time discerning between what is necessary and what isnt. "Oh, i just need that that shiny new *fill-in-the-blank*." No, thats a luxury. What you need is water, food and shelter. Those are necessities. Just about everything else isnt. I wonder how many people on public assistance (e.g. food stamps) have ditched their cable bills?
post #36 of 59
Quote:
Originally Posted by Chris_CA View Post

What? They didn't do anything with the cash.
Apple did not pay cash up front.
They signed an agreement/contract for $3.9 billion.

Apple did prepay for at least some of these components. During the conference call, they specifically mentioned that they had made payments in December for future delivery and also why they termed it a long-term supply investment.
post #37 of 59
Quote:
Originally Posted by Logisticaldron View Post

Uh You realize that over50% are long term investments and overseas.
Uh You realize that one component buy up for a year does not a complete device make.
Uh You realize that spending 10%, 20%, 50% or 100% of your savings just because you have it isnt a sound idea for any investor, whether it be an individual or company.

Do you give away 50% of your savings simply because you make more than you spend? Of course not. In fact, its those that look at $60 billion and see a figure too high to comprehend that probably dont have more than 4 figures in their cash holdings.

Were talking $4 billion for one component for one year. Do you really think that is the only component or that they wont have to increase their investments for each component each year to meet increased demands? What about R&D so they can stay ahead in the game? Thinking itll be smooth sailing for Apple forever and ever and ever is how people fail businesses.

The future isnt certain is the only certainty you can know. For this reason you need to plan for which you can not plan. One way to do that is to keep healthy cash reserves.

Read this article and you might get a clue as to why importing $30 billion back to the US just to give to stockholders is a follish notion: http://arstechnica.com/apple/guides/...-look-big.ars/

I am not in favor of a dividend. However, as a shareholder, it does dismay me that they are making only around 1% on their cash reserves.

I responded to a previous post of yours about spending $4B. Apple is throwing off so much cash that they can finance this out of current profits. Apple added $9B cash in the last quarter alone (although not all quarters will match the holiday quarter).

Yes, Apple needs to maintain substantial cash both for being able to strike quickly when opportunities arise and as a rainy day fund. But they don't need $60B (which will probably be over $70B at next quarter's end) in cash reserves. I truly think they are saving up for "something special" and once they make their move it will be like "how obvious was that". But I agree they will not empty they savings to make such a purchase.
post #38 of 59
Quote:
Originally Posted by MacRulez View Post

Think about it:

A recent AppleInsider article showed that Apple is fifth among handset sellers, and we know that on the desktop OS X has about 10% market share.

We also know that Apple is virtually alone among both handset and PC manufacturers in taking on all of the additional R&D expense of making their own OS.

So they're selling less and spending more than less profitable companies - where do you think the difference comes from?

Except that they don't spend more. Their R&D costs are extremely low. Turns out churning out a new phone every few weeks, even if it's a minor iteration and you slap somebody else's OS on it, is more expensive than releasing one phone a year. Who knew? Moreover, many of the handset manufacturers do have software. Nokia has Symbian and MeeGo. Samsung has Bada. Even HTC is rumoured to be working on its own OS. HP/Palm has PalmOS.

So, yes, I know what you're trying to imply. But you also clearly don't have a clue what you're talking about. Apple is more profitable because it concentrates on the most profitable part of the market, has few products, standardises components across its entire range so it can reduce costs and releases extremely compelling products that people are willing to pay for rather than dumping them into supply channels in the hope that carriers can shift enough to warrant coming back for more.
post #39 of 59
Quote:
Originally Posted by penchanted View Post

I am not in favor of a dividend. However, as a shareholder, it does dismay me that they are making only around 1% on their cash reserves.

I responded to a previous post of yours about spending $4B. Apple is throwing off so much cash that they can finance this out of current profits. Apple added $9B cash in the last quarter alone (although not all quarters will match the holiday quarter).

Yes, Apple needs to maintain substantial cash both for being able to strike quickly when opportunities arise and as a rainy day fund. But they don't need $60B (which will probably be over $70B at next quarter's end) in cash reserves. I truly think they are saving up for "something special" and once they make their move it will be like "how obvious was that". But I agree they will not empty they savings to make such a purchase.

All good points, but we need to keep in mind that there are dozens of component vendors/manufacturers involved with all of Apples products. They can easily spend billions for many components, billions investing in a new factory so they can try to meet growing consumer demands, and/or billions in backing R&D in conjunction with other companies for tech they want to potentially use down the road.

Then there drops in the market and changes in the market they need to contend with. Apple has no monopoly on always be successful or always having the best products on thee market. Im not that old but Ive seen and read about many a company falter because they didnt invest in innovation and didnt plan for an eventual fall from the top from an unforeseen change in the market.

Apples cash will grow, but so will there expenses and investments for R&D and suppliers. Its unlikely this will be a 1:1 exchange that will keep their cash at the same level.

Is there a percentage they should spend each year just because they have the cash? And what would this percentage be of? The previous or next years profits or revenue?
post #40 of 59
Quote:
Originally Posted by poke View Post

This is an Apple website where people take the occasional potshot at other companies. If you want to see non-stop 24/7 irrational anti-Apple raving go to any other tech website.

Occasional? Occasional??? You don't read many comments around here, do you?
New Posts  All Forums:Forum Nav:
  Return Home
  Back to Forum: iPad
  • With 60% of world's touch panel capacity, Apple squeezes competitors
AppleInsider › Forums › Mobile › iPad › With 60% of world's touch panel capacity, Apple squeezes competitors