Get More Thinner iPad

Source: Wikipedia

Apple is dealing Sharp into its iPad and iPhone business in a big way, Peter Misek, at Jefferies & Co., writes in a note to investors Tuesday.

Misek believes Sharp began production of high resolution displays for the next iPad two weeks ago, and that Sharp will help build displays for the next-generation iPhone 5.

While the iPad dominates the tablet computer market, dirt-cheap alternatives introduced by Amazon and Barnes & Nobel could claw away customers where offerings from Hewlett-Packard and Dell have failed to slow the iPad momentum.
To that end, Misek asserts the Cupertino, Calif.-based Mac maker has purchased between $500 million and $1 billion worth of manufacturing equipment for Sharp’s Gen 6 Kameyama manufacturing facility, which will be dedicated to building displays for iPads and iPhones:

Also, we believe that Apple and Sharp together have a modified IGZO (indium, gallium, zinc) technology to achieve 330 dpi, which is sufficient for an HD display while not using IPS nor having to include dual-bar LED backlighting. In our view, this should lead to several design advantages, namely the device can be thinner, battery life should be longer, and the overall experience for users should be meaningfully improved.

The deal Misek describes between Apple and Sharp would account for a big chunk of Apple’s $8 billion capital budget for its current fiscal year. The $8 billion figure, revealed in Apple’s latest annual report, is a 73% increase from the $4.6 billion it spent during its 2011 fiscal year.

Analysts believe Apple buys and owns the key equipment used to build Apple products at its supplier’s facilities. So Apple’s capital spending budget hint the company thinks iPhone and iPad sales will continue booming.

Plus, if Apple plans to introduce television sets late next year, it will need to start spending on equipment to build those sets now. A deal with Sharp to lock up a supply of displays at favorable prices could be one part of that plan.