Sam OliverDigiTimes reported Wednesday that Apple has been in talks with Taiwan-based component makers about touch panel pricing, and the Cupertino, Calif., company has allegedly considered some price increases in negotiations. Sources reportedly said that Apple is looking to secure "sufficient supply" of components for hot-selling products like the iPhone and iPad.
While the move could have a negative impact on Apple's gross margins, it would help to secure the availability of touch panels in the near future. In addition, the report said that a price increase would be a "great help" to the overseas supply chain.
But it wouldn't help Apple's competitors, sources reportedly said. Apple agreeing to a price hike for touch panels would "increase pressure" on other vendors who make tablet computers and touchscreen smartphones.
Apple allegedly plans to build 40 million of its popular iPad in 2011. In order to reach that goal, and keep up with crushing demand for the iPad 2, Apple has reportedly booked more than 60 percent of the total global supply chain touch panel capacity.
Concern over touch panel supply has grown since the earthquake and tsunami disaster struck in Japan. Last week, it was said that Apple's manufacturing partner, Foxconn, has two to three weeks' worth of components stockpiled. Should the situation in Japan not improve by that time, Foxconn could reportedly face a stockout.
Even before the disaster in Japan, Apple's control of the lion's share of the global touch panel market has been predicted to squeeze the company's competitors throughout 2011. Apple Chief Operating Officer Tim Cook revealed in January that his company committed $3.9 billion toward secret long-term component contracts, money believed to be directed toward touch panel displays.
Chip Loder
Marko Zivkovic
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19 Comments
Looks like Apple owns everyone (in the mobile market)
Given the 'crushing demand', I'd guess that Apple will preserve margins and raise the price a little (at least for iPad 3 and on) -- $549, $649, $749 etc.
And, it will be pitched as a price 'discount,' considering all the new doo-dahs that will have been incorporated!
Given the 'crushing demand', I'd guess that Apple will preserve margins and raise the price a little (at least for iPad 3 and on) -- $549, $649, $749 etc.
And, it will be pitched as a price 'discount,' considering all the new doo-dahs that will have been incorporated!
The situation in Japan is a temporary one, not a permanent one. I really doubt apple will raise prices. The price point is one of the factors that made the iPad 1 such a success. I think they'll let their margins take a hit for a period of time if they have to.
Given the 'crushing demand', I'd guess that Apple will preserve margins and raise the price a little (at least for iPad 3 and on) -- $549, $649, $749 etc.
And, it will be pitched as a price 'discount,' considering all the new doo-dahs that will have been incorporated!
Just curious, was there ever a time since 2000 that Apple increased prices of any product that was released in previous years already?
The situation in Japan is a temporary one, not a permanent one. I really doubt apple will raise prices. The price point is one of the factors that made the iPad 1 such a success. I think they'll let their margins take a hit for a period of time if they have to.
Indeed. I do not recall any such happening. As dire as the situation in japan seems to be, is a transient situation.
Having stated this, I also pointed in a previous thread that there is a concern with Apple too concentrated in its source of supplies and as well as manufacturing with just a few companies.
It used to have more diverse manufacturing sites during the computer era. Perhaps one drawback then was the consistency, in terms of quality control that led to consolidation. Not sure. Then, there is cut throat price competition. The first one to go was the local manufacture in California. I think they was had manufacturing in Singapore/Malaysia??? and Ireland. But those were phased out subsequently.
CGC
Apple will put its pile of cash to use!