updated 09:31 am EST, Fri January 18, 2013
iPad mini may be diverting demand
Sharp has "nearly halted" production of 9.7-inch screens for the iPad, Reuters reports. Two industry sources for the newswire agency say that on the iPad line at Sharp's Kameyama plant, production has dropped to the minimum level needed to keep it moving, after a gradual slowdown that started at the end of 2012. Apple is reportedly managing its inventory.
Still unclear is why Apple and Sharp would have to scale back, assuming the report is true. The iPad mini is believed to be an important factor, since it may be pulling demand away from the standard iPad. At the same time, though, seasonal factors may also be at play. Demand for Apple products naturally dips after the holidays; combined with a shift towards the Mini, that may mean that only one or two suppliers are currently needed to make 9.7-inch screens.
Sharp may badly need Apple's business. The company has been suffering financially during the past year as it loses ground in the TV industry. Supplying displays to Apple is a relatively new endeavor, but could prove lucrative in the long run, especially if the company is indeed set to produce panels for an Apple HDTV.
Recently, the Wall Street Journal reported that Apple has also been cutting its iPhone 5 screen orders from Sharp, LG Display, and Japan Display, though that story was later discredited by The New York Times and other sources. There is some concern that unverified reports of slowdowns from Apple supplies could be part of an orchestrated attempt to manipulate the stock.