The boss of LG Display has admitted that the supply of screens is being squeezed because of the strong demand for the Apple iPad. He also warned this could strain inventory of the tablet device as it enters new markets.
“Demand keeps growing and we can’t meet it all. Apple may have to delay launches of the iPad for some countries due to tight component supplies and strong demand,” Kwon Young-soo, CEO of LG Display, told reporters from Reuters and other media outlets 22 July. “We are considering increasing production lines for iPad products but overall supply is likely to remain tight until early next year.”
LG Display’s supply issues demonstrate how the marketplace success of the iPad, in the months following its April release, has become a double-edged sword for Apple and its suppliers: along with increased earnings, both face enormous pressure to meet customer orders.
“An advancement in the rankings means that a company has been successful in introducing new products and that it is allocating more dollars in search and development – two factors that, incidentally, feed innovativeness as well,” Min-Sun Moon, an analyst for iSuppli, wrote in a 21 July research note. “Apple’s expected rise to No. 2 … means that the company’s investment in its new smartphone and tablet has paid off – and will continue to do so for some time to come.”
For the third quarter of fiscal 2010, Apple reported sales of 3.27 million iPads, along with 3.47 million Macs, 8.4 million iPhones, and 9.41 million iPods. That was enough to buoy the company’s revenues to $15.7 billion (£10.1 billion), with a net quarterly profit of $3.25 billion (£2.1 billion).
“We’re increasing [iPad] capacity as quickly as we can,” Tim Cook, Apple’s chief operating officer, told analysts and media during a 20 July earnings call. However, he gave no indication of when that capacity would begin to match demand for the iPad, which has been selling roughly 1 million units per month.
Cook also suggested that the iPad could prove devastating to Apple’s hardware rivals: “If it turns out that the iPad cannibalises PCs that, I think, [that] is fantastic for us because there is a lot of PCs to cannibalise,” he said, adding: “It’s still a big market.”
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