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Samsung Supplies Apple With Touch Screen for New IPad

By Jun Yang
March 14, 2012 2:48 AM EDT 11 Comments
Apple iPad
Apple iPad

Samsung Electronics Co. (005930) will supply the screen for Apple Inc. (AAPL)’s new iPad after LG Display Co. (034220) and Sharp Corp. (6753) didn’t meet the U.S. company’s quality requirements, an analyst with iSuppli said.

Samsung, the world’s top flat-panel maker, currently is the sole vendor of the display for the 9.7-inch, touch-screen device that goes on sale March 16, said Vinita Jakhanwal, a senior manager at iSuppli, a unit of Englewood, Colorado-based IHS Inc. Samsung’s shares surged to a record.

The supply deal deepens Apple’s partnership with Samsung, which already makes the chips that power the iPhone and iPad, even as the companies sue each other around the world regarding patents. Apple unveiled a new version of the iPad last week that features a sharper display and faster processor to fend off growing competition from products including Samsung’s Galaxy Tab.

Steve Park, a Seoul-based spokesman for Apple; Jason Kim, a Seoul-based spokesman for Samsung; Claire Ohm, a Seoul-based spokeswoman for LG Display; and Miyuki Nakayama, a spokeswoman for Osaka, Japan-based Sharp, declined to comment.

“The display specifications on the new iPad are very demanding in terms of the very high resolution,” Jakhanwal said in an e-mail. “Achieving this high resolution without compromising on the power consumption and brightness and maintaining Apple’s quality standards are supposedly proving to be a challenge for LG Display and Sharp.”

Patent Lawsuits

Samsung shares climbed 2.4 percent to 1,250,000 won at the close of Seoul trading, their highest since listing in June 1975. LG Display gained 0.4 percent to 28,300 won, compared with a 1 percent rise in the benchmark Kospi index. Sharp added 4.3 percent to 531 yen in Tokyo, after falling as much as 5.1 percent earlier in the day.

Apple, based in Cupertino, California, and Samsung have been locked in patent disputes concerning mobile technology and design since April, when the iPhone maker accused the Suwon, South Korea-based company of copying its products.

The iPad’s new display has four times as many pixels as the previous version, making on-screen text, images and video appear crisper and more realistic. Apple may almost double spending on screens for tablets and smartphones this year, according to iSuppli.

LG Display

Market research firm Gartner Inc., based in Stamford, Connecticut, estimates 103.5 million tablet devices will be sold in 2012, with Apple accounting for two-thirds of them.

LG Display is Apple’s largest vendor of liquid-crystal displays used in the iPhone and older models of the iPad. The Seoul-based company gets about 2 percent of its revenue from Apple, according to data compiled by Bloomberg.

LG Display and Sharp may start shipping panels for the new iPad by April, said Jakhanwal, who’s based in Santa Clara, California.

Apple may want to diversify its sources for the displays because of the lawsuits with Samsung, said Kang Yoon Hum, a Seoul-based analyst at NH Investment & Securities Co.

“Since the relationship between Apple and Samsung isn’t great these days, Apple would want to get shipments elsewhere as well,” Kang said by phone.

To contact the reporter on this story: Jun Yang in Seoul at jyang180@bloomberg.net

To contact the editor responsible for this story: Michael Tighe at mtighe4@bloomberg.net

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