The first quarter of each year is generally a slow purchasing period for electronics, but that’s only part of the story when it comes to why Sharp has almost stopped producing 9.7-inch panels for the Apple iPad.
Industry sources cited by the hit-and-miss trade publication DigiTimes say production of the larger Apple iPads is expected to decrease by as much as 40% in the first quarter of 2013.
The decrease is partially caused by the aforementioned new-year effect. Another major factor, the sources say, is one of Apple’s own products – the iPad mini, which has begun to eat away at the sales of its bigger siblings.
“As a result, Sharp will stop nearly all production for iPad panel products throughout the period at one of its northern Taiwan-based plants, and touch panel makers TPK and Wintek are expected to see decreased revenues as a result,” the sources reportedly said.
The most interesting bit is yet to come, though. According to the same knowledgeable sources, there’s a third reason why Sharp has almost halted production of 9.7-inch iPad screens.
“…Sharp's production cut is also because the company is working on panel technology for Apple's next-generation iPad and iPad mini products,” the sources said, adding that Apple will most likely “seek out LG Display and Samsung Display to make up for Sharp's supply if necessary.”
Finally, the sources said that the iPad mini continues to have a higher bill of materials (BOM) than all the other Apple tablets, which means less profit per unit for the Cupertino company.
Apple is expected to unveil an army of products this year, beginning with two new tablet computers – a revamped iPad 5 (taking cues from the iPad mini’s design), and the iPad mini 2 with a Retina display.