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Apple picks Sharp as LCD supplier

Posted: 28 Nov 2011 ?? ?Print Version ?Bookmark and Share

Keywords:LCD panel? tablet? supplier?

Apple Inc. has announced Sharp Corp. as a new supplier of LCD panels that will be used in the next iPad. The people who are aware about the situation said the iPad-maker is expanding its component suppliers in light of the strong demand for its products.

One of the people said Apple is also investing in facilities at Sharp's panel manufacturing factories in Japan, without specifying the amount being invested. Apple is believed to work with multiple component makers to ensure that it can secure enough parts to make its iPhones and iPads. Osaka-based Sharp makes LCDs that are used in tablets, smartphones and flat-screen TVs.

The person familiar with the matter said Apple's next iPad is expected to come out sometime next year, and Sharp's Kameyama No. 2 plant in central Japan will manufacture LCD panels for the tablet.

Sharp already supplies LCD panels for Apple's iPhone smartphones, according to the person. The company will be supplying panels for the next iPhone that is expected to come out sometime next year, the person added.

Strong demand for the iPhone and iPad has fueled Apple's earnings growth, even though its results for its most recent quarter missed analysts' expectations. The company said last month that it sold 11.1 million iPads in its fiscal Q4 ended Sept. 24, compared with 4.19 million a year ago. In that quarter, the company's profit rose 54 percent from a year earlier to $6.6 billion, while revenue climbed 39 percent to $28.27 billion.

Apple's decision to use Sharp's LCD panels for the iPad comes as the company is also locked in a series of patent lawsuits with Samsung Electronics Co. While supplying parts for the iPhone and iPad, the South Korean consumer electronics firm is one of Apple's competitors in the smartphone and tablet markets. The two companies have been suing one another globally as they vie for the top spot in the markets that have seen strong demand this year.

Samsung declined to comment on whether Apple is diversifying its display suppliers. Lee Jae-yong, Samsung's CEO and president, said he had discussions with Apple CEO Tim Cook about extending Samsung's existing deal to supply parts to Apple through 2013-2014. Apple also relies on South Korea's LG Display Co. to supply LCD screens.

The plans to supply iPad screens come as Sharp is trying to turn around its struggling LCD panel business by strengthening smaller-size panels for smartphones and tablets.

"This would allow Sharp to count on a more stable sales volume and would help its technology gain more attention," said Mizuho Investors Securities analyst Nobuo Kurahashi. "It would be a stretch" to assume that Apple's choice of display panel suppliers has been affected by its patent issues with Samsung, when cost and specific technological requirements are crucial to the products' success, said Kurahashi.

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