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Rumors about OLED iPad resurface
Monica Chen, Taipei; Joseph Tsai, DIGITIMES [Tuesday 13 July 2010]

Apple reportedly plans to launch its second-generation iPad, using 5.6-inch and 7-inch OLED panels, as soon as in the fourth quarter of 2010 with Compal Electronics having a chance to receive the orders, according to sources from component makers.

The sources noted that Apple has recently placed new iPad orders to Taiwan-based component makers for the fourth quarter of 2010 and the first quarter of 2011 with 9.7-inch, 5.6-inch and 7-inch models all included.

The 9.7-inch model will see some minor changes, while Apple will add Chimei Innolux (CMI) as one of its panel suppliers.

The new 5.6- and 7-inch iPads will mainly target the e-book reader market, separating them from the 9.7-inch model, which mainly targets multimedia entertainment, the sources stated.

Although market watchers originally expected Pegatron Technology to land iPad orders from Apple, the sources indicated that the orders have actually been grabbed by Compal. However, Compal declined to comment on specific clients

The sources also stated that since Samsung Electronics and LG Display have recently been throwing heavy resources into the development of OLED panels, costs are dropping gradually and with Apple's brand image and high average selling price (ASP), Apple should have no problem adopting OLED panels, which have higher price than standard panels, into its devices.

Commenting on the rumors, Digitimes Research senior analyst Mingchi Kuo pointed out that the largest OLED maker, Samsung Electronics', current OLED capacity is not even enough to supply the company's own handset products; therefore, the capacity is unlikely to be enough to supply Apple's new devices for the fourth quarter of 2010. Tight OLED capacity may ease in the second half of 2011, Kuo added.

Kuo also noted that Compal is unlikely to strive for orders from Apple, since manufacturing gross margins on Apple's products are at electronic manufacturing service (EMS) levels, which is a lot lower than notebook OEMs can accept.

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