Apple Inc.’s suppliers are gearing up for mass production of a new iPad mini in the fourth quarter that will likely feature a high-resolution screen from Samsung, people familiar with the matter say, an indication of the difficulty the U.S. company faces in its attempt to reduce its dependence on its biggest rival.Apple is working with suppliers in Asia on its next iPad mini with a high-resolution “retina” display, unlike the current iPad mini that comes with a lower-resolution screen, the people said. The size of the new tablet will likely be the same as the current 7.9-inch model, which was released in November last year. Apple has also been contemplating multiple color back covers for the new tablet, they said.
For the next iPad mini, component makers have been told that Apple plans to use screens from Samsung Electronics Co.’s display unit, Samsung Display Co., as well as Japan’s Sharp Corp. and LG Display Co., the people said. One person said that Apple initially planned to use Sharp and LG Display but later decided to add Samsung to ensure adequate supply of screens. For the current iPad mini, Apple uses screens from LG Display and Taiwan’s AU Optronics Corp., component makers said.
Apple routinely tests various designs and has been known to make changes late in the design process so it is unclear whether the product will make its way to market. However, an iPad mini with a retina display appears more likely, particularly after Google Inc. released its latest Nexus 7 tablet last week with a high-resolution screen.
Representatives at Apple, Samsung, Sharp and LG Display declined to comment.
Apple’s choice to have Samsung make displays for its next generation iPad mini underscores the unique relationship between the two companies. Apple and Samsung have worked together for the better part of a decade—at first on making chips for smaller and thinner iPods, and later on processors that power the iPhone. But Samsung’s rise to become the world’s top smartphone maker has complicated its relationship with Apple. The Cupertino, Calif. iPhone maker accused the South Korean company of copying its designs in a 2011 lawsuit. And the two companies are still fighting it out in courts trying to ban each others’ products from key markets.
Apple has attempted to disentangle itself from its once vital parts supplier. Recently, Apple signed an agreement with Taiwan Semiconductor Manufacturing Co. to produce chips starting in 2014, for example, according to people familiar with the matter. Apple has also tried to rely more on suppliers other than Samsung for iPhone and iPad screens.
But Apple can’t entirely shift its business away yet because for some components Samsung is one of few suppliers that can produce the parts in time and with the quality Apple demands. With retina displays for the new iPad mini, Apple has decided to shift its orders to Samsung from AU Optronics.
“We cannot take [Apple’s] orders because our rate of output efficiency is too low to be profitable,” said a manager at AU Optronics. He noted the company doesn’t make a profit from manufacturing current iPad mini screens.
“There are not many display choices for Apple,” said Wanli Wang, an analyst with CIMB Group in Taipei. Only Samsung, LG Display and some Japanese panel makers are capable of making high-quality displays that meet Apple’s standards and it also makes sense to use multiple suppliers, he said.
-Google news
