Apple's latest entry into the red-hot tablet market, the iPad Mini, has so far been a critical and commercial success. The 7-inch tablet, which starts at $329, has been even more successful than Apple anticipated, according to a blog post from NPD DisplaySearch, which reported Apple planned to sell 6 million units in 2012, but the company is asking panel makers to ship more than 12 million in the fourth quarter of 2012 to fulfill the strong demand.
While the iPad Mini was criticized as too expensive for the 7-inch segment of the tablet PC market, given competition from other devices, including the Amazon Kindle Fire, Google Nexus, Asus tablets and others, David Hsieh, vice president of the greater China market for NPD DisplaySearch, wrote there is always a strong base of customers who only want Apple products, and noted the iPad Mini was recently voted one of the hottest consumer products of 2012 in Japan.
However, supply chain issues are limiting Apple's ability to meet consumer demand. In particular, the device's display is a difficult element to manufacture, thanks to the high-resolution and low-power consumption requirements, as well as wide viewing angle and high color saturation specifications, which require additional photomask steps in the manufacturing process. More mask steps means longer production times and lower yield rates, Hsieh wrote.
In its "Quarterly Mobile PC Shipment and Forecast Report," NPD predicts that the 2013 tablet PC market will exceed 170 million units, and if Apple hits its targets, it will continue its domination at approximately 60 percent market share.
Apple will need to find other panel suppliers in addition to current suppliers AUO and LG Display, just as it always has three suppliers for the iPad panels, Hsieh said. Among the candidates Apple could employ are Century in China, Innolux in Taiwan and Panasonic LCD in Japan, which are all experienced at In-Plane Switching (IPS) technologies.
"In 2013, it is likely that Apple will adjust its product portfolio to meet the strong demand for the iPad Mini," Hsieh wrote. "We believe that Apple is targeting total iPad shipments of 100 million in 2013, half accounted for by the iPad Mini, and 40 million new iPad and 10 million iPad 2, as production continues at least until the middle of 2013."
The report also noted that although the new iPad, which launched alongside the iPad Mini and sports a more powerful processor, was originally planned to replace the iPad 2, strong sales of the legacy model have continued, and panel makers have adjusted new iPad panel production downward while maintaining production of iPad 2 panels. According to NPD's "Quarterly Large Area TFT Panel Shipment Report," panel makers, including Samsung, LG Display, Sharp and Innolux will ship 70 million 9.7-inch iPad panels in 2012.