The deal will guarantee Apple a supply of an additional 3 million displays for the upcoming tablet device over an unspecified amount of time, according to a high-ranking industry representative that recently spoke with The Korea Times.
"The most expensive component in the iPad is the display and touch-screen interface that costs $80 for all models," that person said. "The 9.7-inch display is more than twice the size of the iPhone 3GS screen and costs five times as much."
A little over a year ago, Apple entered into a similar 5-year, $500 million deal with LG Display Co. for flat panel displays through the 2013 calendar year. Although details of the arrangement were scarce at the time, it's now reported that agreement has been expanded to $800 million to cover the supply of 10 million iPad displays.
Apple chose LG as its primary iPad display screen supplier because it favored the in-plane switching (IPS) technology offered by South Korea-based electronics manufacturer. Although it's not as sharp as vertical alignment (VA) technology currently used by Samsung and Sony on their display panels, it offers a broader 178-degres viewing angel an faster response times.
As such, Samsung has agreed to hop on the IPS bandwagon and is currently in a development phase that will enable it to increase production of IPS displays that it plans to ship in bulk to "an American company" believed to be Apple, according to people with knowledge of the situation.
The move brings the total number of iPad display panels on order by Apple to 13 million, underscoring the Cupertino-based company's strategy of forming multi-supplier agreements for critical components that form the foundation to its highest-volume and most popular product offerings.
By sourcing key components from more than one partner, Apple builds a layer of protection into its supply chain that affords it leeway in the event that one supplier runs into problems filling orders. It also increases competition in the marketplace for the company's business, helping to drive down wholesale prices.
Meanwhile, an anonymous Samsung executive has also let slip that the company is "in deep talks" to supply its flat panel displays for Apple's upcoming 4G iPhones and iPads.
"As far as I know, Apple will use [our] LCD panels for its next iPhone models," the executive said. "We are receiving related orders from Apple,"
65 Comments
I don't understand this.
Samsung just launched an iPhone killing GOOGLE phone. Just yuesterday.
The phone has a 4 inch screen made by Samsung and runs Android. They are trying to kill the iPhone.
Why would Apple choose to do business with them, when they are stabbing us in the back at the same time?
They are in bed with Google, fer chrissakes!
I don't understand this.
Samsung just launched an iPhone killing GOOGLE phone. Just yuesterday.
The phone has a 4 inch screen made by Samsung and runs Android. They are trying to kill the iPhone.
Why would Apple choose to do business with them, when they are stabbing us in the back at the same time?
They are in bed with Google, fer chrissakes!
They are the largest LCD supplier in the world...
K
I don't understand this.
Samsung just launched an iPhone killing GOOGLE phone. Just yuesterday.
The phone has a 4 inch screen made by Samsung and runs Android. They are trying to kill the iPhone.
Why would Apple choose to do business with them, when they are stabbing us in the back at the same time?
They are in bed with Google, fer chrissakes!
That is how fanboys look at the situation that isn't how real business decisions are made.
Samsung has done business with Apple for many years. In fact they have been the major supplier in fact maybe the only supplier Apple has used for RAM for years now. If Samsung has the best screens and they offer Apple the best deal that is how business works.
LG also makes LCD screens for Windows users does that mean Apple shouldn't use them either?
I have hitachi harddrives in my Windows systems and in my Macbook Pro. Go figure.
They are the largest LCD supplier in the world...
K
In that case, Apple needs to manufacture there own LCD panels. Rewarding a disloyal company like Samsung with a Quarter-Billion dollars is crazy.
I've wondered - How much more would it cost to manufacture electronics, such as this, in the United States. Would it be so much more that it would significantly add to the cost of the product. It's a shame we can't do this here.