Sales of Apple’s iPad device only look to grow in 2011 according to a report from DigiTimes, that estimates LG Display could receive orders for 35 million iPad panels from Apple in 2011. Together with Samsung and Chimei Innolux (CMI), who is scheduled to join Apple’s iPad supply chain in the first quarter of 2011, each possibly receiving orders for 15 million units.
Apple’s Strategic Screen Size Decision
Apple’s decision to create a 9.7 inch screen is making it difficult for competitors to match and the iPad’s screen size will likely lower component pricing in a way that only benefits Apple. Forcing competitors to design and build 5 and 7 inch screens that don’t benefit from the massive economy of scale Apple’s iPad high volume sales are creating.
The 9.7 inch screen size has proven to be a sweet spot for tablet users, offering a balance between portability and usability. This strategic decision by Apple not only sets a standard in the market but also leverages their purchasing power to drive down costs. Competitors, on the other hand, are compelled to innovate in different screen sizes, which may not achieve the same economies of scale. This disparity can lead to higher production costs for competitors, making it challenging to offer competitive pricing without compromising on quality or features.
Impact on the Supply Chain
The involvement of multiple suppliers like LG Display, Samsung, and Chimei Innolux (CMI) in Apple’s supply chain highlights the company’s strategy to diversify its sources and mitigate risks associated with supply disruptions. By placing substantial orders with these suppliers, Apple ensures a steady supply of high-quality panels, which is crucial for meeting the growing demand for iPads.
Moreover, this strategy also fosters competition among suppliers, potentially leading to better pricing and innovation. For instance, LG Display’s anticipated order of 35 million panels underscores its significant role in Apple’s supply chain, while Samsung and CMI’s involvement indicates Apple’s intent to maintain a robust and flexible supply network. This approach not only secures Apple’s production capabilities but also positions the company to swiftly adapt to market changes and technological advancements.
In addition to securing a reliable supply of panels, Apple’s collaboration with these suppliers can drive advancements in display technology. For example, the development of more energy-efficient screens or higher resolution displays could be accelerated through these partnerships, further enhancing the iPad’s appeal to consumers.
Furthermore, Apple’s influence on the supply chain extends beyond just panel production. The company’s demand for high-quality components can lead to improvements in manufacturing processes and quality control standards across the industry. This ripple effect can benefit other manufacturers and ultimately result in better products for consumers.
In conclusion, Apple’s strategic decisions regarding screen size and supply chain management are key factors driving the anticipated growth in iPad sales for 2011. By leveraging its purchasing power and fostering competition among suppliers, Apple not only secures a steady supply of high-quality panels but also drives innovation and improvements in the industry. As a result, the iPad continues to set the standard in the tablet market, offering consumers a compelling combination of performance, quality, and value.
Via Apple Insider Via DigiTimes
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