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Apple Takes Another Step Towards Total Production Control

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SusanLeighTaylor20100909_KCBS_0706 Susan Leigh Taylor
Susan attended Indiana University-Purdue University-Fort Wayne (home...
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CUPERTINO (KCBS) – Apple Inc. is shifting the production of its iPhone and iPad displays to Sharp Corporation marking a big change in the way Apple does business, and one more step towards taking total control of the manufacturing process.

Apple is basically buying the gear and installing it in a factory that will be run by Sharp. We’ve seen the company take more control over manufacturing over the last two years, with Apple also making its own chips.

“Apple is going right down to the semi-conductor level. That’s a big change that allows them to differentiate, and have competitive advantage,” said Peter Misek an analyst at Jeffries and Company, a global securities and investment banking group. “If they succeed and do this well, it will allow them to leapfrog the competition.”

KCBS’ Susan Leigh Taylor Reports:


Apple’s previous partner was struggling with the new HD iPad3 displays.

“By working and partnering with Sharp we think they’re able to use a new technology and either make the device as thin as the current iPad, or potentially thinner,” said Misek.

There’s some good news in all this for consumers. The move should help keep prices down when the iPad 3 debuts.

“The complexity probably meant that either prices would have to go up, or Apples margins would have to go down,” said Misek. “Now, Apple’s going to be able to keep margins the same and probably is going to keep the iPad2 around, but lower prices next year when the iPad3 comes around.”

(Copyright 2011 by CBS San Francisco. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed.)

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