Apple considering price hikes to secure supply of touch panels

By on March 24, 2011, 3:21 PM
Apple is considering paying higher prices to secure sufficient supply of touch panels used in its iOS devices, including the iPhone, the iPod touch, and the iPad. Cupertino has talked with Taiwan-based makers about increased quotes, according DigiTimes.

Apple is able to consider such a move because of its huge capacity requirements. For example, the company has an internal shipment goal of 40 million iPad units in 2011. While suppliers will likely benefit from a price hike, there will be increasing pressure on other vendors of tablet PCs and smartphones, especially on those who do not ship anywhere near the number of devices that Apple does.

Last month, it was revealed that Apple occupied close to 60 percent of the global touch panel capacity. Touch panels were thus suffering a serious shortage, which further hurt supply for Apple's competitors since the lack of components meant shipment volumes were unable to keep up with orders, especially for second-tier players.

At the time, Apple was holding control over the capacity of major touch panel makers such as Wintek and TPK. This could continue if the company pays a premium to suppliers in order to maintain its position, and it will certainly want to do so to keep pushing out the new iPad 2.


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