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A Supply Chain rumor claims that Apple's next-gen iPads with Two-Stack OLED Displays could raise consumer prices by 60%-80%

1 XF COVER - 129-inch-apple-ipad-pro-2022-(Click on image to Enlarge)

With Apple's CEO stating last month that he thinks that the market "will be a little rough in the short term," this morning's supply chain rumor is a little hard to take at face value. According to The Elec, pricing for Apple's first OLED iPads to be released next year could cost consumers as much as 60% to 80% more than today's pricing.  Patently Apple posted a supply chain report last week that claimed that pricing for the iPad Pro could be more than double. Clearly prior to going into price negotiations with Apple this summer, Samsung and LG Display are trying set expectations high.

According to industry sources, Apple is considering to charge around $1,500 for the 11-inch model and $1,800 for the 13-inch model depending on storage choices.

Compared to the current iPad Pro lineup, the 11-inch model is more than 80% more expensive and the 13-inch model more than 60% more expensive. The basic price of the 11.0-inch iPad Pro, which is an existing liquid crystal display (LCD) model, is $799, and the basic price of the 12.9-inch iPad Pro, which is a mini LED-LCD model, is $1,099.

The OLED iPad price estimates of $1,500 (11-inch) and $1,800 (13-inch) are higher than the prices of some MacBooks (notebooks) currently on sale. The basic price of the 13.6-inch MacBook Air with the M2 chip is $1199, and the basic price of the 13.3-inch MacBook Pro with the M2 chip is $1299. On the other hand, it's lower than the base price of $1999 for the 14.2-inch or 16.2-inch MacBook Pro with the M2 Pro or M2 Max chip.

The industry reaction to $1500 and $1800 is split in two. Interpretation as "a reasonable level of increase even considering that it is an Apple product with a high loyal customer base" and "iPad is not as loyal as the iPhone and there are many substitutes, so it is difficult to maintain sales of the existing iPad Pro lineup with “It will be difficult,” for example.

OLED iPad price estimates from current industry sources may change in the future. Since OLED for iPad, which LG Display and Samsung Display plan to supply, is still in the development stage, the panel price has not been decided. Panel procurement costs account for the largest portion of material costs.

It is known that Apple, LG Display, and Samsung Display are discussing the supply price of OLED panels for iPad at around $270 for the 11-inch model and $350 for the 13-inch model. It is two to three times higher than the existing 10-inch low-end IT product OLED panel supply price of $100 to $150.

OLED for iPad has increased supply price by introducing new processes such as two stack tandem (two light emitting layers) structure, low-temperature polycrystalline oxide (LTPO) thin film transistor (TFT), and hybrid OLED structure (glass substrate + thin film encapsulation). It is inevitable. Negotiations on the specific price of OLED for iPad are expected to begin in the summer.

For more on this, read the full report by The Elec.

The advanced two-stack display technology without a doubt will cost Apple more and those price increases will be passed on to their customers. However, unless Apple has other technologies to justify price hikes of 60-80%, fans are likely to find that pill hard to swallow. Yet the price increase rumor may have come from the likes of Samsung prior to beginning negotiations with Apple this summer. At the end of the day, this rumor is likely a staged negotiation tactic, with final pricing coming in much less than are rumored today.

10.0F0  Supply Chain News & Rumors


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