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Low yield rates for in-cell touchscreens may affect Apple's next iPhone

post #1 of 41
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Apple could feel the squeeze from display makers for the launch of its next iPhone, as yield rates for the in-cell touch panels Apple is rumored to adopt are said to be too low to generate profits.

To encourage Japan Display, LG Display and Sharp to produce more in-cell touch panels, Apple has reportedly offered subsidies as high as $10 to $15 per panel, according to the hit-or-miss Taiwanese industry publication DigiTimes. With yield rates too low, display makers are allegedly struggling to make a profit on the next-generation display technology.

Citing rumors in the touch-panel industry, Tuesday's report said the poor yield rates are "likely to cause certain disruption to Apple's shipping schedule for the new iPhone."

Japan Display reportedly has the highest yield rate of Apple's in-cell touch panel partners. But its yield rate is just 50 percent, the report said.

"Due to the poor yield rates, combined shipments of in-cell tocuh panels for the upcoming iPhone are estimated at only 4-5 million units in July —?far below Apple's target of 20-25 million for all of the third quarter, the rumors pointed out," authors Siu Han and Jessie Shen wrote.

In-cell technology


Market watchers reportedly believe that Apple could be forced to approach TPK, the major panel supplier for previous iPhone models, to build more traditional touch panels using the full lamination process. However, DigiTimes Research analyst Luke Liun believes it is unlikely Apple would revert to previous-generation touchscreen technology, as such a move would probably delay the launch of the next iPhone.

Numerous reports have indicated that Apple plans to feature in-cell touchscreen technology on its next-generation iPhone. The new in-cell screens integrate the touch sensors into the LCD itself, allowing the screen to be even thinner by eliminating the need for a separate touchscreen layer.

DigiTimes is notorious for being the source of unreliable rumors about upcoming products, particularly with respect to Apple. However, the publication was the first to report in April that Apple planned to adopt in-cell touch panels for its 2012 iPhone, a detail that was later corroborated by analyst Ming-Chi Kuo of KGI Securities, as well as The Wall Street Journal.

More evidence of Apple's switch to in-cell touch panels also came earlier this month, when touch panel supplier Wintek announced its June sales were down an unusually high 33.6 percent month over month. That was interpreted by analyst Brian White with Topeka Capital Markets as a sign that the company may have lost out on key orders for Apple's next-generation iPhone.
post #2 of 41

Sounds like another attempt to manipulate AAPL by putting out negative rumors. Do serious investors take rumors seriously? Or is this stuff just for fanboys and iHaters to argue about?

post #3 of 41

How much thinner are we talking about? I personally don't like "too" thin cell phones, that is why I carry my Galaxy S II in a bumper case. Without it feels too light and too thin.

post #4 of 41

Think of the thinner display as a trade-off for more battery space.

 

You're right that there is a minimal "thinness" which will still feel correct in your hand, not break in your pocket, etc.

post #5 of 41
We hear this every single time a new iPhone or iPad is about to be announced. I ageee - it probably is an attempt at manipulation just before the price booms in order to maximize profit for "analysts".

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post #6 of 41
The strange thing is, the new design doesn't look any thinner than the current model. They would also have more room for the battery, with the phone being much longer, so is all this trouble over the screen worth it? 
 
I'm still hoping the two-tone design is a complete red herring and Apple come out with a super slim phone more like this...
 
 
post #7 of 41

Notice how Samsung is not a supplier.  If this is really a problem they can just pay a bit more for the first batch until the production line improves and the yield gets better.

post #8 of 41
Quote:
Originally Posted by xmiku View Post

How much thinner are we talking about? I personally don't like "too" thin cell phones, that is why I carry my Galaxy S II in a bumper case. Without it feels too light and too thin.

 

 

 

 

Quote:
The strange thing is, the new design doesn't look any thinner than the current model. They would also have more room for the battery, with the phone being much longer, so is all this trouble over the screen worth it? 
 
I'm still hoping the two-tone design is a complete red herring and Apple come out with a super slim phone more like this...
 
 

 

 

We're talking 1/2 a millimeter here.  if you're looking for a thinner phone... move along.

 

Not so much an improvement on thickness of the phone, but more weight/volume can be added to battery, and the visual clarity of the display will supposedly be better (less layers of glass, less refraction).

 

Because Apple feels the phone thickness and squared edges actually makes the phone a better camera (for gripping), my guess if you see any change in thickness it will be very minimal.

post #9 of 41
Quote:
Originally Posted by lkrupp View Post

Sounds like another attempt to manipulate AAPL by putting out negative rumors. Do serious investors take rumors seriously? Or is this stuff just for fanboys and iHaters to argue about?
LOL, it's a Digitimes rumor. It's automatically tossed into the circular file.

Not just by investors, but by pretty much everybody except the technology media who worship at the altar of the Almighty Pageview.
post #10 of 41
Quote:
Originally Posted by lkrupp View Post

Sounds like another attempt to manipulate AAPL by putting out negative rumors. Do serious investors take rumors seriously? Or is this stuff just for fanboys and iHaters to argue about?

To me this is the classic 'we put out a rumor to pump up some supplier companies stock and now we have to find a way to recant it without looking like morons so we'll push a rumor of a problem so we can say yes they were planning o do X but can't just yet'. This issue can cover everything from the iPhone and iPod touch to the iPad mini, even perhaps computers and displays

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post #11 of 41
Quote:
Originally Posted by herbapou View Post

Notice how Samsung is not a supplier.  If this is really a problem they can just pay a bit more for the first batch until the production line improves and the yield gets better.

I don't believe samsung ever made iPhone displays. LG or Sharp.  However they are supplying processors for Apple, like the A4, A5, and the current A5X.  We don't know what chip is in the iPhone 6.  

post #12 of 41
Quote:
Originally Posted by Downpour View Post

The strange thing is, the new design doesn't look any thinner than the current model. They would also have more room for the battery, with the phone being much longer, so is all this trouble over the screen worth it? 
 
I'm still hoping the two-tone design is a complete red herring and Apple come out with a super slim phone more like this...
 
 

That is still my favorite iPhone mockup. I would love to see that debuted in September although it's not likely.

 

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post #13 of 41
Quote:
Originally Posted by TheOtherGeoff View Post

 

Because Apple feels the phone thickness and squared edges actually makes the phone a better camera (for gripping), my guess if you see any change in thickness it will be very minimal.

 

I really don't like the feel of the 4/4S though, my wife has my old 3GS and it's a much better design in that respect. You could argue the current brick design works better as a camera, but it isn't a camera, it's a phone.

 

Phones need to be slim, aesthetically pleasing, comfortable to hold (i.e. rounded corners) and should fit in your pocket.

 

Apple have been disappointing me recently with all these minor incremental updates. I want to see another technological breakthrough from them, like we used to get back in the good old days. 

 
 
 
post #14 of 41
Quote:
Originally Posted by blackbook View Post

That is still my favorite iPhone mockup. I would love to see that debuted in September although it's not likely.

 

 

 
Yeah, it could be improved in a couple of ways, but it's not far off perfection. The back could definitely look better, but it's just a homemade mockup, so I'm sure Apple would do a better job.
 
I'm really hoping this is the direction Apple will go in for the iPhone 6. That shape with a bezel-free screen would be epic.
 
post #15 of 41
Quote:
Originally Posted by lkrupp View Post

Sounds like another attempt to manipulate AAPL by putting out negative rumors. Do serious investors take rumors seriously? Or is this stuff just for fanboys and iHaters to argue about?

 

 

Do you seriously think that DigiTimes is part of some vast conspiracy?   I suppose that fits in with the "us against them" AppleFan meme, but with zero evidence, it seems like a far-fetched position to take.

 

If this story is true, then it is very bad for Apple.  The iPhone represents a huge portion of their profits.  Around half?  And with iPhone sales currently flagging, Apple needs to get the iPhone 5 on the market ASAP.  

 

My guess is that it would not be possible to use the regular screens at this point, absent a major redesign.  How could Apple bet the farm on a technology that cannot be produced in sufficient quantities?  Did Jony over ride Tim and insist on the design aspects over the supply chain aspects of the product?  How could something like this happen?

post #16 of 41
Quote:
Originally Posted by Downpour View Post

 

 
Yeah, it could be improved in a couple of ways, but it's not far off perfection. The back could definitely look better, but it's just a homemade mockup, so I'm sure Apple would do a better job.
 
I'm really hoping this is the direction Apple will go in for the iPhone 6. That shape with a bezel-free screen would be epic.
 

One of the things I like about the mock is that the phone keeps the current 3:2 screen aspect ratio even though the screen's size increases to 4 inches. In the mock this is done by making the phone slightly wider, while also making the phone shorter so it's dimensions just look better to the eye than the taller narrow 16:9 leaks we've been seeing lately.

post #17 of 41
Tim cook must be crying into his keyboard after this Digitimes report.

What a terrible oversight - not to check whether the millions of parts he has just ordered can actually be made.

You would have thought they might have tested these things first. How embarrasing.

(Insert rolling eyes icons and sarcasm tags here)
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post #18 of 41
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Originally Posted by amoradala View Post

Tim cook must be crying into his keyboard after this Digitimes report.
What a terrible oversight - not to check whether the millions of parts he has just ordered can actually be made.
You would have thought they might have tested these things first. How embarrasing.
(Insert rolling eyes icons and sarcasm tags here)

There is still a level of risk involved with each new advancement. Early yields might not reveal all potential problems.

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post #19 of 41

Hit or miss??? WTF, no it's always miss. Digitimzes hazzzzzzesss nooosx idezz waz theys towkinz abzoxutz................EVER

 

 


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post #20 of 41
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Originally Posted by logandigges View Post

Hit or miss??? WTF, no it's always miss. Digitimzes hazzzzzzesss nooosx idezz waz theys towkinz abzoxutz................EVER

Did you graduate form LOL Cat University?

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post #21 of 41
Quote:
Originally Posted by amoradala View Post

Tim cook must be crying into his keyboard after this Digitimes report.
What a terrible oversight - not to check whether the millions of parts he has just ordered can actually be made.
You would have thought they might have tested these things first. How embarrasing.
(Insert rolling eyes icons and sarcasm tags here)

Correct. Digitimes means that it's not actually worth reporting, except in a world where regularly reporting on the time given by a broken clock is worthwhile.
post #22 of 41
Quote:
Originally Posted by AppleInsider View Post

To encourage Japan Display, LG Display and Sharp to produce more in-cell touch panels, Apple has reportedly offered subsidies as high as $10 to $15 per panel
 

 

$10 to $15 per unit doesn't seem like a big leap in the manufacturing cost. Presumably the yield rates will go up over time and they will withdraw the subsidies. Tim Cook is a clever guy, I'm sure he's factored this into the manufacturing costs.

post #23 of 41
Quote:
Originally Posted by JeffDM View Post

Correct. Digitimes means that it's not actually worth reporting, except in a world where regularly reporting on the time given by a broken clock is worthwhile.

The way MR keeps tabs on release dates of Apple product releases and links the articles about products with their dates, I wish AI would have something similar for rumours about upcoming products. A Rumor Roundup page that could not only list rumours about upcoming products but also list the accuracy of various sources.

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post #24 of 41

So does this mean the 9/12 rumor date will be pushed back, or are we looking at back orders for the next iPhone for the remainder of 2012?  I hope not I was looking forward to getting one on launch day.

post #25 of 41
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Originally Posted by SolipsismX View Post


Did you graduate form LOL Cat University?

yezz i haz hadz a mazterx

 

 


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post #26 of 41
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Originally Posted by Shaun, UK View Post

 

$10 to $15 per unit doesn't seem like a big leap in the manufacturing cost. Presumably the yield rates will go up over time and they will withdraw the subsidies. Tim Cook is a clever guy, I'm sure he's factored this into the manufacturing costs.

 

Withdrawing subsidies is hard.  Paying up front for initial yield is how Apple works.   Apple typically works with a 'we will pay up front with cash for XX units delivered over YY months, with an option to increase to ZZ units the during those YY months' with negative inducements (you can't hit those numbers, then you owe us...).  This blocks any other OEM from buying those ZZ units if capacity increases.

 

But to me.. is not based in any facts.

post #27 of 41
Like Geoff says above (#8) it's probably about image quality in the screen, not extra space for the battery. Apple will do anything for image quality, it seems. And the "phone" part may turn out to be less important than the camera and screen part.

Keeping the edges squared off is part of that function. You don't want the edges rounded off like an old wet bar of soap. Too dangerous to handle such a wimped-out shape.
post #28 of 41
Quote:
Originally Posted by Downpour View Post

 

I really don't like the feel of the 4/4S though, my wife has my old 3GS and it's a much better design in that respect. You could argue the current brick design works better as a camera, but it isn't a camera, it's a phone.

 

Phones need to be slim, aesthetically pleasing, comfortable to hold (i.e. rounded corners) and should fit in your pocket.

 

Apple have been disappointing me recently with all these minor incremental updates. I want to see another technological breakthrough from them, like we used to get back in the good old days. 

 
 
 

 

In fact, in reality, it's a computer with a mobile data plan and happens to have a phone app, a music player app, and a bunch of other apps, and it works well as a camera, so well you're not going to need a pocket camera.  Apple: http://www.apple.com/iphone/built-in-apps/camera.html  

 

 

Phones need to make calls.  You're trying describing a mobile phone, and you're missing most of the critical functions (good sound, battery life, good antenna, easy to use for phone like functions... conference calls, speakerphone, etc).  You basically said, "something shiny and small"  

 

Rounded edges and corners on a slim phone make it harder to take out of pocket.  If you can't get it out of your pocket and answer a call, then it's hardly a useful phone.  You'll say 'not me'  and I'll say, you're probably not over 50 or arthritic, or have the hands of a petite youth, or the hands of a 6'8' 300lb person, or a person who has mittens on (I live in snow 5 months out of the year).  When you sell a 1 phone a year to 'everyone'  there are some design decisions for the the masses most people ('market of one') can't grok. 

 

BTW,  can you explain what you mean by technological breakthrough, when your entire complaint is about rounded edges?  It doesn't follow.

post #29 of 41
Quote:
Originally Posted by TheOtherGeoff View Post

Rounded edges and corners on a slim phone make it harder to take out of pocket.

I think the opposite is true. The square iPhone can sometimes get "stuck" when you try to whip it out of your pocket because an edge catches the fabric. a slim rounded phone probably wouldn't have that problem

post #30 of 41

If the yield rates are an issue it would be something that would be overcome in time, the question we ask next is how constrained will the next iPhone be at launch, will it impact international launches while the US gets it first (kind of nice getting the new toy at launch unlike the other phone makers).

post #31 of 41
Quote:
Originally Posted by RaptorOO7 View Post

If the yield rates are an issue it would be something that would be overcome in time, the question we ask next is how constrained will the next iPhone be at launch, will it impact international launches while the US gets it first (kind of nice getting the new toy at launch unlike the other phone makers).

I doubt that Apple would allow supply to be seriously constrained. Since it's hardly a new product line Apple has dependable data on expected demand, and quite some time to plan for it. They aren't so disorganized that they would allow touchscreens to limit supply. Not on Tim Cook's watch. This seems more like a "get 'em while they're hot" build-up.

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post #32 of 41
Quote:
Originally Posted by RaptorOO7 View Post

If the yield rates are an issue it would be something that would be overcome in time, the question we ask next is how constrained will the next iPhone be at launch, will it impact international launches while the US gets it first (kind of nice getting the new toy at launch unlike the other phone makers).

Quote:
Originally Posted by Gatorguy View Post

I doubt that Apple would allow supply to be seriously constrained. Since it's hardly a new product line Apple has dependable data on expected demand, and quite some time to plan for it. They aren't so disorganized that they would allow touchscreens to limit supply. Not on Tim Cook's watch. This seems more like a "get 'em while they're hot" build-up.

Sometimes things crop up and you just have to deal with it as best you can. if there are less supply than an assumed demand there are tactics they can take to deal with it.

One is simply delaying the launch a bit so they can stock pile more components. However, that can be short lived as greater demand than available supply will catch up to you if you can't get ahead of it. They can gain some traction by releasing in less markets (read: countries) out of the gate. In recent years Apple has been so far ahead that they've released in an impressive number of countries right away. The iPhone 4S was released in 7 countries in early October and 22 more a couple weeks later.

Another solution relieving some pressure on one product by introducing another. If they can introduce a low-cost tablet they will certainly lose some customers who can only afford one or the other at a given time, or simply don't see a need for both at the same time. This would likely reduce some of the strain on a product that is harder to produce even if this other produce isn't the cash cow as the other. The reason they'd do this is 'a' sale is better than no sale.

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post #33 of 41
It makes it sound like AMOLED is becoming price competitive. The low supply could prove quite useful for Apple.
post #34 of 41
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Originally Posted by aBeliefSystem View Post

It makes it sound like AMOLED is becoming price competitive. The low supply could prove quite useful for Apple.

I still haven't seen any AMOLED display that comes close in quality to the IPS displays Apple uses.

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post #35 of 41
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Originally Posted by herbapou View Post

Notice how Samsung is not a supplier.  If this is really a problem they can just pay a bit more for the first batch until the production line improves and the yield gets better.

 

Samsung do not have in-cell-touch technology of this type. They have on-cell-touch which reduces the thickness a little and is used on their SAMOLED+ screens but it is one stage back from this in technical terms

post #36 of 41
Quote:
Originally Posted by SolipsismX View Post


Sometimes things crop up and you just have to deal with it as best you can. 

Not buying it in this case Soli. There's no way Apple didn't already have solid proof of the yields before committing to this change in display technology for their flagship device and biggest profit center. Heads would roll at Apple. Either there's no in-cell display slated for the next iPhone or there's no supply constraints IMHO. One or the other. The story is bogus as far as I'm concerned. As for who the source of it is, who knows.

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post #37 of 41
Quote:
Originally Posted by Gatorguy View Post

Not buying it in this case Soli. There's no way Apple didn't already have solid proof of the yields before committing to this change in display technology for their flagship device and biggest profit center. Heads would roll at Apple. Either there's no in-cell display slated for the next iPhone or there's no supply constraints IMHO. One or the other. The story is bogus as far as I'm concerned. As for who the source of it is, who knows.

The MobileMe teams thought they had everything under control. Apple was sure using the old dB scale for a new antenna design would be fine. There has never been features touted for a future release of Mac OS that have been quietly removed before it ships. And those are internal issues that don't require any outside contracts.

If you think that Apple doesn't have any of the same issues that plague every other company in the world they are just a sugar-free Kool-Aid drinker looking for any excuse to show that Apple will fail. The bottom line is that Apple has consistently shown they are better but they are still at the mercy of the dozens upon dozens of companies they do business with to keep their end of the deal. If you've ever engineered anything you'd know that small scale doesn't always scale well or there are unforeseen issues regardless of how much you plan ahead for every issue. The best you can do is plan for contingencies and work around them. What I stated previously are common ways in which those can and are handled.

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post #38 of 41
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Originally Posted by SolipsismX View Post


The MobileMe teams thought they had everything under control. Apple was sure using the old dB scale for a new antenna design would be fine. There has never been features touted for a future release of Mac OS that have been quietly removed before it ships. And those are internal issues that don't require any outside contracts.
If you think that Apple doesn't have any of the same issues that plague every other company in the world they are just a sugar-free Kool-Aid drinker looking for any excuse to show that Apple will fail. The bottom line is that Apple has consistently shown they are better but they are still at the mercy of the dozens upon dozens of companies they do business with to keep their end of the deal. If you've ever engineered anything you'd know that small scale doesn't always scale well or there are unforeseen issues regardless of how much you plan ahead for every issue. The best you can do is plan for contingencies and work around them. What I stated previously are common ways in which those can and are handled.

Curious then...

Do you think Apple would be leaking a Sept.12th event and unveiling if there was any potential supply issue?

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post #39 of 41
Quote:
Originally Posted by Gatorguy View Post

Curious then...
Do you think Apple would be leaking a Sept.12th event and unveiling if there was any potential supply issue?

1) That date is still just a rumour.

2) Even if that date is accurate my previous comments, which you discounted out of hand, explain how a company can move forward even if supplies are constrained.

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post #40 of 41
Quote:
Originally Posted by SolipsismX View Post


1) That date is still just a rumour.
2) Even if that date is accurate my previous comments, which you discounted out of hand, explain how a company can move forward even if supplies are constrained.

I wasn't intending to dismiss your examples of ways companies can deal with unexpected shortages, so my apology if you thought that. Your post was certainly valid...

 

just not applicable to Apple and the upcoming iPhone in at least this specific instance IMO.

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