March 15, 2013, 7:40 AM — The iOSphere rumor machine for the iPad 5 is running on vapors, given that some were predicting as of last week that the Next iPad will be released "April-ish."
In the absence of anything like data, the so-called rumors amount to ruminating over the mysteries of the supply chain -- in light of completely unfounded estimates and projections of future sales for both the 9.7- and 7.9-inch iPad models; asserting that "delays" mean iPad will be announced in June; and expecting the Next iPad mini to result in lower prices for ... other companies' tablets.
You read it here second.
iPad 5 shipments will be throttled by shortage of touchscreens
The company said to be Apple's main supplier of thin-film touch sensors for the iPad mini won't be able to build enough of them to equip the iPad 5 and the iPad mini 2, according to brief post at DigiTimes, which as usual cited unnamed "industry sources."
The company is Japan-based Nissha Printing, which DigiTimes says is "Apple's main supplier of thin-film touch sensors for the iPad mini." Its touch panels are used in a variety of mobile devices and other products. Apple introduced a new kind of touch sensor with the iPad mini, making the overall display thinner and improving an array of display and color attributes.
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The rest of this rumor hinges on at three assumptions. First, DigiTimes is one of many tech news sites that is convinced that Apple will introduce this same display technology in the upcoming iPad 5 (and continue using it in the upcoming iPad mini 2). "The next-generation 9.7-inch iPad is expected to use the same touch sensors as the iPad mini's thin-film DITO (G/F2) touch panel structure," according to the post.
Second, the single or at least primary source for these touch panels will be Nissha Printing. "This means that Apple will be looking mostly to Nissha to supply the touch sensors for both devices as the Japan-based firm is a leading provider of the technology, the sources said."
The third assumption, or perhaps assertion, is that Nissha won't be able to meet the projected demand for the two new iPads (not to mention any continuing sales of the original iPad mini). "Nissha currently has an annual production capacity for 60 million 9.7-inch equivalent touch sensors, said the sources," reports DigiTimes. "Approximately 33 million iPads are expected to be shipped during 2013 while shipments of the 7.9-inch iPad mini are expected to reach 55 million units [for a total of 88 million units], indicating that Nissha's production capacity of the touch sensors will be below Apple's expected demand for the two tablet products."
These numbers confuse more than they clarify, in part because they don't say what production capacity Nissha has for the 7.9-inch iPad mini touch sensors. The current fourth-generation 9.7-inch iPad doesn't use the new thin-film touch panel, so the purported 60 million unit "limit" must refer to new thin film displays for 2013.
The "expected" 2013 shipment numbers are nothing more than unsourced estimates, because Apple doesn't announce targets and hasn't separately reported iPad and iPad mini unit sales. In its fiscal 2012, ending in September, Apple shipped 58.2 million iPads, all of them the 9.7-inch model. In Q1 2013, ending in December 2012, the company reported selling a total of 22.8 million iPads, including both sizes.
All manufacturers have production limits. Apple has said that device sales were constrained in the final quarter of calendar 2012 in part because of these limits. DigiTimes says that its sources say that "Nissha has plans to expand its production capacity by 30% before the end of the first quarter of 2013." If that's true, and assuming DigiTimes is referring to production of the new thin-film displays, that would boost the annual production run to 80 million. Keep in mind, DigiTimes' sources say a combined total of 88 million thin-film touch sensors will be needed for the two new iPads in 2013.
DigiTimes concludes by saying the two new, different-size panels may create "competition between the two Apple products' supply chains."
"The supply chains, which will not be entirely the same even though similar technology is expected to be used in the two types of tablets, may have to scramble for the thin-film touch sensor technology during the second quarter of the year in order to meet shipment demand in the following quarter," according to the post. "The sources eluded that this type of internal supply chain conflict may cause one of the devices to lack in shipments upon their release."
The Rollup is not an expert on supply chains. But as even the DigiTimes story concedes, Apple can and undoubtedly does seek multiple OEM sources for the components used at varying stages in its final products. It's a complex management task. But it's one that Apple CEO Tim Cook has a lot of experience overseeing, as Apple leverages its supply chain experience, lessons and economies of scale -- along with billions of dollars of capital investment -- to sustain and increase the iPad's, and the iPhone's, growth.
iPad 5 to ship in June
Perhaps influenced by the recent "spring forward" of daylight saving time, Jefferies stock analyst Peter Misek has sprung forward his "belief" about the shipping date of the Next iPad: to June from this spring.
An array of sites have picked up on the recent release of Misek's latest Note to Investors (NTI), one of them being ValueWalk: "[The Jefferies analysts] also believe that the company's iPad refresh will be pulled forward [to] June and that the company is switching to an IGZO display for the 9.7-inch model so that the weight will be cut in half and sales will hopefully pick up," according to ValueWalk's Michelle Jones.
It's not clear whether she believes that Misek thinks the weight of the display or of the entire unit will be cut in half using the IGZO technology, but either one would be a remarkable technological feat.
In case you've wondered what Peter Misek looks like, Cult of Mac recently included a photo as part of its Feb. 13 summary of Misek's Apple predictions over the past several years.
"It's been a crazy day of rumors," wrote Cult of Mac's Buster Heine then.
"Rumors about iPhone 5 sales slipping, the iPhone 5S coming out this summer, an Apple TV event in March, an iTV launch in September, and something about the 4.8-inch iPhone 6 being 'delayed' until 2014. Busy day ... but all of that info came from one guy, Peter Misek."
Among Misek's predictions: a "far reaching" Apple video service to disrupt traditional TV businesses. The Apple HDTV would launch in Q4 of 2012, would be called iPanel, is already in full production, and will be sold through Verizon and AT&T in early 2013.
iPad mini 2 will drive down prices for other tablet brands
The iPad mini 2, whenever it's released in 2013, will continue to be so good that other tablet makers will give up and try to sell their products by lowering their prices.
That's the theory apparently put forward by J.P. Morgan stock analyst Mark Moskowitz, as summarized by websites such as International Business Times.
"In Moskowitz's opinion, other device makers have not been able to cook up a tablet as 'compelling' as the iPad, at least not yet," writes IBT's Kristin Dian Mariano. "As a result, the rest of the industry will be forced to compete on price."
The IBT post quotes from Moskowitz's Note to Investors: "In our view, 2013 will be important for the laggards because Apple's iPad Mini, particularly when the second generation is launched, stands to drive other vendors to even lower price points. We expect sub-$199 price points to be reached this year by other vendors, but we are skeptical the feature sets will be able to establish a sustainable sales pipeline."
Mariano says that Moskowitz "expects average selling prices to continue to drop by double digits this year and next." Even assuming that "digits" refers to dollars and not percentages, that covers a lot of ground: from $10 to $99.
This may sound familiar. Because Moskowitz, and the rumoring websites, seem to be pretty much recycling what he said back in October 2012, when the iPad mini was formally announced.
"Starting at $329, the iPad Mini is pricier than other mini tablets, but the product will still capture sales from lower-priced rivals, says J.P. Morgan's Mark Moskowitz," according to a post then by CNET's Lance Whitney.
The reason for the predicted success against lower-price small tablets such as the Google Nexus 7, Amazon Kindle Fire HD and Samsung Galaxy Tab 2: "In our view, the larger screen size and iOS 6 capabilities of iPad Mini stand to be good enough to grab share from the $199 tablet crowd," according to Moskowitz in October.
The more things don't change, the more they stay the same.
TUAW.com's Mike Schramm seems almost surprised that anyone is buying the iPad mini. In a post this week, he cites a survey of visitors to the TechBargains.com website, a deal aggregator for electronic products. Schramm apparently agrees with a quote from TechBargains President Yung Trang: "Before it was introduced the iPad Mini received lackluster interest in comparison to other Apple products, according to a previous TechBargains' survey. Once consumers got their hands on it and saw the value, our recent data shows popularity for the iPad Mini has nearly doubled."
But the consumers who got their hands on it were the one who were already interested in it; and the ones who didn't ... weren't. Considering how new the "small tablet" market is, including what consumers even mean by "small tablet," surely it's not surprising that "interest" has increased.
"I don't think it was ever really unpopular -- the iPad is an excellent tablet no matter what -- but I do think that when it was first announced, many consumers failed to see its appeal," Schramm writes.
Let's think. Different analysts estimate or guess or believe that somewhere between 7 million-10 million people bought an iPad mini in the last quarter of 2012. Clearly there are "many" more, in fact vastly more, who have not. What does that mean? Think of all the people on the planet who have not bought an iPhone, Apple's biggest selling product ever. "Many consumers failed to see its appeal."
The TechBargains survey unintentionally reveals complex trade-offs that Apple, so far successfully, has to navigate in mobile devices. The vast majority of respondents want a higher-resolution Retina display for the next iPad mini, along with a faster processor, both of which demand more power; and the higher-resolution display makes it more difficult to be also thinner. Yet a majority of the respondents also want longer battery life, and a thinner and lighter tablet.
As Forbes contributor Ewan Spence wrote on reading the survey, "Good luck working out the physics behind that mythical tablet."
John Cox covers wireless networking and mobile computing for Network World. Twitter: @johnwcoxnww Email: firstname.lastname@example.org
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