The upcoming iPad 3 is due to arrive in early 2012 and is expected to go into trial production by October.

The Wall Street Journal reported that Apple is in talks with its Asian manufacturers and suppliers.

DigiTimes had earlier reported that Apple had initiated the process of certifying the key components for its iPad 3. One of the suppliers, Radiant Opto-Electricals, got a contract from Apple to manufacture LED backlight units.

The first reference to the upcoming iPad 3 was found in the USB config files found in iOS 5 beta in June. The discovery referred to two iPads iPad 3, 1 and iPad 3, 2.

In its current avatar, the iPad 2 is internally recognized as iPad 2,1 (Wi-Fi), iPad 2, 2 (GSM) and iPad 2, 3 (CDMA) and the identification of the iPad 3 under only two codes iPad 3, 1 and iPad 3, 2 possibly alludes to the next iOS 5 devices as world devices compatible with both GSM and CDMA networks.

It is widely surmised that the iPad 2 will feature a 2048x1536 screen resolution. In fact it is believed that Apple is not launching the iPad 3 this year because of high-resolution display supply constraints.

DigiTimes reported that one of the Apple suppliers of LCD panels for iPad 2, Chimei Innolux (CMI) has failed to become a certified LCD panel supplier for the Apple iPad 3 due to technological hurdles.

Unlike many companies that outsource product design to Original Design Manufacturers (ODM) to save on cost, Apple still maintains tight control over design. Bloomberg, in an article titled Commentary: Apple's Blueprint for Genius, states that many tech companies meet with ODMs to figure out what designs have been crafted by them and then ask them to change the design to incorporate new features.

Apple goes against this grain and compels its engineers to do the mechanical and electrical work. Bloomberg cites the example that in the iPod Shuffle, Apple designers had to cut a circuit card in two and stack the pieces, bunk-bed style, to make use of the empty air space created by the height of the battery in the device. However, Apple does outsource its manufacturing to companies like Foxconn in China which maintains rigid control over the production process.

As Bloomberg article quotes an executive at a rival MP3 maker saying This is an issue for Apple, because the A-team engineers [at the ODMs] don't like working with Apple. It's like when you were a kid, all your dad let you do was hold the flashlight, rather than let you try to fix the car yourself.

A report in June by Techunwrapped stated that iOS 5 SDK for iPad contained images double the resolution of the present ones. The iPad 2 sports a screen resolution of 1024x768. The report quoted a tipster who stated: As I was going through the iOS SDK I came across some images in the new Twitter framework. The resolution appears to be 1,536 x 2,048.

However, the rumor has raised concerns that increasing the screen resolution on iPad to 2048x1536 could strain the battery life. Also Apple followed a different strategy with iPhone 4 whereby it optimized the display through Retina Display technology.

Apple uses Retina Display in iPhone 4 which sports a screen resolution of 960x640. Apple explains Retina Display as: Developing pixels a mere 78 micrometers wide, Apple engineers were able to pack four times the number of pixels into the same 3.5-inch (diagonal) screen found on earlier iPhone models. The resulting pixel density of iPhone 4 -- 326 pixels per inch -- makes text and graphics look smooth and continuous at any size. Thus Apple could further optimize the iPad 3 screen similarly rather than increasing the screen resolution.

Another rumor suggests that Apple wil fit the next generation A6 chipset in the iPad 3. Apple has given the contract for the A6 chipsets to Taiwan SemiConductor Manufacturing Company (TSMC). An earlier report had cited TSMC had started trial production of the Apple A6 line of processors. It is reported that the TSMC manufactured A6 chipset will incorporate 3D IC technology.

It has also been reported that TSMC is in production with 3D IC technology and is in a race with Intel to manufacture a 3D IC chip. EETimes reported that TSMC could deliver processors with 3-D interconnet by end of 2011. In such a scenario, the iPad 3 release will be further delayed.

It has been surmised that the iPad 3 could incorporate Apple's Thunderbolt technology. Thunderbolt I/O enables one to daisy-chain up to six peripherals. It offers up to 10Gbps transfer speeds and offer PCI Express performance. It also extends 10 Watts of power to peripherals. The Thunderbolt I/O which is currently available with MacBook Air, MacBook Pro, iMac and Mac Mini.

Apple was able to slim down its iPad 2, as it is a mere 0.34-inch thick and weighs 1.3 pounds. However the iPad 3 is rumored to be lighter as Apple may go in for carbon fiber material instead of an aluminum frame.

Apple filed for a patent in November 2010 under the title Reinforced Device Housing which mentions use of a fiber-in-matrix type material like carbon fiber reinforced plastic (CFRP). Though the patent does not specifically mention iPad the illustration figures do give away the context. Thus Apple has the wherewithal to deliver a lighter iPad 3 by the use of lighter fiber materials.

Another reason why Apple could be deferring the iPad 3 release is to re-work its supply chain due to its legal wrangling with Samsung. Samsung is one of Apple's key suppliers.

DigiTimes reported in December 2010 that Samsung will receive orders for 15 million LCD units. The tremors of the patent lawsuit is affecting the supply-chain, a fact which was underscored by Samsung Electronics as it forecasts a 26 percent drop in profits during the second quarter pertaining to a decline in sales in its LCD division as Apple is one of Samsung's largest LCD buyers.

These changes in the supply-chain as Apple looks for new suppliers could also be the reason behind the delay in iPad 3.

And, while the iPad 2 was considered a mere evolution, the iPad 3 is set to bring a revolution in the tablet market.

Must Read:  iPad 3 will Launch Early 2012?