Josh Ong
9.7-inch IPS panels that fail to meet Apple's stringent requirements for use in the iPad 2 are being sold to China-based vendors, Taiwan-based supplier sources have told DigiTimes (via MacNN).
Sources pointed out that LG Display and Samsung Electronics, two main suppliers of the panels, shipped an estimated 12-15 million 9.7-inch IPS panels in the second quarter, while 7-9 million iPad 2s are projected to ship in the same period.
The extra panels are reportedly grouped into three portions: those unable to meet requirements, those sent to Apple manufacturer Foxconn for increased shipments in the third quarter, and those sold to white-box vendors in China.
As an example of a generic iPad clone, the report cited the T10 Android 2.2 tablet from Chinese vendor SmartDevices, as well as devices from vendors AGSO and Wanlida. The T10 sells for CNY1,900 ($293), nearly half the price of the base iPad 2 model, which sells for CNY3,688 ($570) in China.
SmartDevices' T10 Android tablet
Various sources have suggested that Apple controls as much as 60 percent of the world's available touch panel capacity. It is also said that Apple leverages upfront cash payments in order to obtain critical components that are in short supply.
A recent report from DigiTimes claimed online retailer Amazon could face difficulty securing display orders for its rumored LCD tablet. Amazon is expected to release the device this fall, but Asian suppliers are reportedly "reluctant" to make commitments, in part because Apple has booked up much of the available production capacity.
The iPad has seen significant demand in China, though Apple has a long way to go in tapping the full potential of the tablet market in the world's most populous country. Apple's launch of the iPad 2 drew substantial lines, which included scalpers hoping to capitalize on the limited supply of the device.
China's four Apple stores are currently the company's highest trafficked and highest grossing locations. The company is set to open a fifth store in the country later this year.
Charles Martin
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Mike Wuerthele and Malcolm Owen
30 Comments
This sounds like a legitimate claim, except that the Apple contracts most likely require that all defective, rejected items will be destroyed. Sure, there are few that would make it out, but not enough to make a "white box" product that would support high sales.
This sounds like a legitimate claim, except that the Apple contracts most likely require that all defective, rejected items will be destroyed. Sure, there are few that would make it out, but not enough to make a "white box" product that would support high sales.
You're forgetting China is the new Wild West. Apple can do its best but we've seen prototype leaks, component leaks, and all kinds of shenanigans from various parties dealing with Apple and non-Apple related products. In the developing world it's not like the developed world. Those who get caught are only a fraction of those that get away. One can never really know what is going on in China.
Here in Asia a lot of people are even concerned about any food products coming out of China, be it milk, fish or anything. Heck, they even faked eggs. Eggs...!
http://www.nytimes.com/2011/05/08/wo...er=rss&emc=rss
With regard to the rejected IPS panels most likely the batches that were meant to be destroyed or disassembled got "misdirected" to these "white box" tablet makers. It could be a few hundred, a few thousand, a few hundred thousand or more. Enough for the tablet makers to try and sell and profit - no further original work is needed, you just slap together the components and throw in Android.
Perhaps, somebody failed to follow order. Just sent them up to North Korea for hard labour and all singing and dancing hail-to-the-chief assembly.
That tablet (and surely many other KIRFs) looks like a real iPad. Samsung is the chief copycat of course but to differentiate iPad even further, Apple need to make it lighter, thinner, longer real world battery life and make it known that iOS rules in term of the quality of Apps in the AppStore, features and usages. Most importantly, need to use indipustable custom component or two.
You're forgetting China is the new Wild West. Apple can do its best but we've seen prototype leaks, component leaks, and all kinds of shenanigans from various parties dealing with Apple and non-Apple related products. In the developing world it's not like the developed world. Those who get caught are only a fraction of those that get away. One can never really know what is going on in China.
Here in Asia a lot of people are even concerned about any food products coming out of China, be it milk, fish or anything. Heck, they even faked eggs. Eggs...!
http://www.nytimes.com/2011/05/08/wo...er=rss&emc=rss
With regard to the rejected IPS panels most likely the batches that were meant to be destroyed or disassembled got "misdirected" to these "white box" tablet makers. It could be a few hundred, a few thousand, a few hundred thousand or more. Enough for the tablet makers to try and sell and profit - no further original work is needed, you just slap together the components and throw in Android.
You are right, I do forget that China has a good bulk of the world population and manufacturing facilities.
Yippee! I just picked up an Android tablet that contains Apple iPad-rejected components and saved a bundle. It might not be good enough for Apple customers but it's definitely good enough for me.
I suppose it's a good way to do business and at least all those unused parts don't just end up as landfill. I'm sure there are a lot of people in the world that would be satisfied with second and third tier products. You buy what you can afford and I see no reason why those people can't be served to some measure. One thing for certain, that's a lot of rejected displays. I always suspected that from the beginning that yields are far from 100% but I guess rejects could be as high as 20%. Building a high-quality tablet is not going to be for the companies with shallow pockets. A company that doesn't have the retail clout of Apple is going to lose a lot of money on tablets they can't sell. Apple is sitting high on the food chain and the competitors are fighting for scraps. Very lucrative for Apple but very costly for competitors.
In the end, Apple's economies of scale are going to be unbeatable. Competitors will have to keep cutting corners to keep costs down and their products won't even be close to an iPad's or iPhone's construction.