Apple Locks Up 60% of Touch Panels, Locking Out Competitors

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Apple has locked up some 60% of the global supply of glass capacitive touch panels, according to a report from Taiwan newspaper DigiTimes. By doing so, Apple has been able to ensure its own ability to ship however many iPads, iPhones, and iPod touches it can sell, and it’s having the ancillary effect of making it very difficult for the competition to make their own devices.

According to DigiTimes (thanks to LoopInsight for the heads up) Research In Motion, Motorola, HP, and other large corporations are busily scrapping amongst themselves over the remaining 40% of supply, leaving smaller, second tier companies (like many of the companies we saw showing Android tablets at CES), out of the running for this high end component completely.

There are other options, including thin-film capacitive touch panels, but thin-film solutions offer a different tactile feel to users and have less durability than the glass-capacitive displays that Apple has been using for iPad, iPhone, and iPod touch.

Apple has long worked hard to secure supply of linchpin components needed for its product lines, from RAM to LCD displays in the later part of the last decade to the touch panels that are so important to its iOS empire today. With the company’s enormous warchest and hot selling devices that have been limited only by how many can get made, Apple can offer the kind of security for suppliers that no other company can.

As part of its story, DigiTimes said that Apple has an internal goal of shipping 40 million iPads in 2011. Though that number was not directly sourced, it was implied that it came from forecasts given to component makers based in Taiwan.

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8 Comments Leave Your Own

Tiger

Gee, what else do you do with $70 billion in cash….

obvious

Can we say anti-trust law suit?

Lee Dronick

Can we say anti-trust law suit?

You can say it, but that doesn’t mean that it applies to this situation and I pretty sure that it doesn’t.

Bryan Chaffin

I would add that it…wait for it…obviously does not apply to this situation. smile

Lee Dronick

I would add that it?wait for it?obviously does not apply to this situation.

Which begs the question how would Apple lock out competitors? Long term contracts?

Tiger

If I go and buy all of a special type of candy only found in one store, does that subject me to antitrust regulations?  (believe me, I’d be one to do it, so yeah, it’s an interesting question)

geoduck

If I go and buy all of a special type of candy only found in one store, does that subject me to antitrust regulations?

I hope not. Last November we just about cleaned Seattle out of Pearson’s Nut Rolls and Mountain Bars.

(You can’t get them in Nanaimo BC. wink )

Lee Dronick

If I go and buy all of a special type of candy only found in one store, does that subject me to antitrust regulations?

No.

Lost in the kerfuffle is that Apple didn’t buy all of the touch panel supply, only 60%

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