When Apple debuted its long-awaited iPad mini in October, many analysts criticized the $329 price tag as too expensive for a 7-inch entry tablet.
Indeed, the tablet has to compete against like Amazon's Kindle Fire, Google's Nexus and a lineup of Asus tablets.
However, as DisplaySearch analyst David Hsieh noted, there is always a strong core base of customers who only want Apple products. For example, the iPad mini was recently voted one of the hottest consumer products of 2012 in Japan.
As such, it comes as little surprise that the iPad mini immediately faced supply shortages for its 7.85” XGA display, supplied by AUO and LG. Originally, Apple planned to sell 6 million units in 2012, although only 1.6 million panels shipped in Q3’12. As such, Apple is asking panel makers to ship more than 12 million in Q4’12 to fulfill the strong demand.
"Panels for iPads are known to be hard to make, not only because of the high resolution and low power consumption requirements, but also because the wide viewing angle and high color saturation specifications require additional photomask steps in the manufacturing process," Hsieh explained.
"Standard a-Si TFT backplanes require 4 or 5 photomask steps, but the iPad and iPad mini panels require 6 to 7, and for panel makers with limited experience in IPS or FFS production, as many as 8 mask steps may be used. Increased mask steps means longer production times and lower yield rates."
According to Hsieh, Apple will likely adjust its product lineup to meet the strong demand for the iPad mini, as it is currently eyeing total iPad shipments of 100 million in 2013 - half accounted for by the iPad mini, 40 million new iPads and 10 million iPad 2s.
" [We] forecast the 2013 tablet PC market to be over 170 million, if Apple hits its targets it will continue its domination at approximately 60% market share.
"If the iPad mini volume is anything near 50 million units, Apple will need to find other panel suppliers in addition to AUO and LG Display, just as it always has three suppliers for the iPad panels. At the same time, Apple will need to manage its iPad panel supply in the event that it parts ways with Samsung," he added.