Apple's iPad Supply Might Be Greater if Other LCD Makers Enter In

Apple's expansion plans for the iPad could get bogged down by LG's inability to make enough of the right displays, but recent rumors are rife that Apple might be ordering additional iPad displays from other LCD makers.

Reports from various sources in recent months have pointed to Samsung and Chimei Innolux as potential additional suppliers for the tablet computer's screen, a component largely regarded as the biggest single bottleneck to iPad production.

After selling more than three million iPads in little more than three months, Apple plans to open up shipments on Friday of this week to an additional nine countries, bringing the total to 19.

LG Can't Meet Apple's Demands
On the other hand, LG Display CEO Kwon Young-soo was quoted earlier this week by Reuters as contending that LG won't be able to keep up with Apple's demands for iPhone screens until 2011.

"Demand [from Apple] keeps growing and we can't meet it all. Apple may have to delay launches of the iPad in some countries due to tight component supplies and strong demand," said the LG exec.

"We are considering increasing production lines for iPad products but overall supply is likely to remain tight until early [next] year."

Apple Optimistic Over Shipping Enough iPads
The LG CEO made these comments a few days after Apple COO Tim Cook voiced optimism that Apple can step up its supply capacity to meet market demands for the iPad tablet, although Cook didn't specify how Apple expects to do so.

"There are a number of things that we have to increase in order to do that. But I am fairly confident that we will be able to increase the capacity," Cook said during an Apple financial earning call. ["We're] investing enormous time and resource in increasing our capability and getting iPad out to as many people as we can."

At about that time, supply chain analyst firm iSuppli predicted that Apple will ship 12.9 million iPads in 2010, 36.5 million in 2011, and 50.4 million in 2012, assuming that Apple is able to "align suppliers to meet demand needs."

iSuppli had previously estimated 2010 iPad sales of just over 7 million. Similarly, analyst firm ABI Research also recently shifted its forecast upward to as many as 10 million iPads this year.

Unique IPS Screen a Bottleneck to iPad Production
The iPad's 9.7-inch, LED-backlit LCD display uses a technology known as In-Plane Switching (IPS) which typically appears in TVs rather than PCs. In IPS LCDs, the crystal molecules are oriented so that their motion is parallel to the panel, rather than perpendicular to it, resulting in a very wide viewing angle of up to 180 degrees with very vivid color.

Yet unlike a typical TV screen, which uses a 16:10 or 16:9 aspect ratio, the iPad's screen uses a much narrower 4:3 ratio, according to DisplaySearch.

"Perhaps they were trying to find a middle ground between the requrements for books, magazines, and newspapers and the requirements for video and gaming," DisplaySearch analysts said in a recent report.

The iPad display also uses a fingerprint-resistant oleophobic coating, and it is arsenic- and mercury-free.

Will Samsung or Immolux Chime in with More Screens?
LG, however, doesn't seem to be Apple's only potential source for IPS screens. Back in February, for example, iSuppli analyst Vinita Jakhanwal wrote that the iPad's screen is probably sourced from three different suppliers, with LG and China-based Chimei Innolux the two "most likely" suppliers.

In March, the Korea Times reported that Samsung Electronics had won a $240 million deal to ship three million iPad panels to Apple, citing an anonymous "high-ranking industry representative" as its source.

The Korea Times' source noted, however, that in order to produce the screens, Samsung would need to adopt IPS instead of its own traditionally favored vertical alignment (VA) technology.

In another report, which drew on unspecified "market sources," Asia-based DigiTimes stated in June that Samsung would ship start shipping 500,000 panels monthly for iPads in July.

Meanwhile, LG recently confirmed that it's readying its own tablet device, and Samsung is rumored to be doing likewise.

iSuppli this week predicted an actual oversupply of LCD panels from LG, Samsung, Chimei Innolux, and Taiwan's AU Optronics, although the panels covered by this forecast are of the larger size used in TVs as opposed to the smaller types used in mobile devices.

Conversely, this week's report from iSuppli also pointed to a scarcity of LCD panels with LED back-lighting.

• Apple iPad Review
• Apple iPad 3G Review