Taiwanese publication DigiTimes has reported that the panel producers are experiencing too low yield rates of the in-cell touch panels to generate profits despite the fact that Apple reportedly offered subsidies - estimated at $10-15 per panel - to suppliers in order to cheer them up to produce more and ensure stable shipments after the launch of iPhone 5.
According to the website, though Japan Display currently has the best yield rate at 50 percent, it's still not enough for the firm to make profits from the touch panel production. LG Display has increasingly improved its yield rate of in-cell panels. However, it still remains inept of ramping up production.
When it comes to Sharp, yield rates for the production of in-cell panels have not been improved much, which has prompted Apple to request the firm to "undergo the validation process again."
"Due to the poor yield rates, combined shipments of in-cell panels for the upcoming iPhone are estimated at only 4-5 million units in July - far below Apple's target of 20-25 million for all of the third quarter, the rumors pointed out," said the DigiTimes report.
"However, Apple is still encouraging the panel suppliers to make more at any cost, and is even providing support including subsidies to help lower their production costs," the report added.
While industry sources have speculated that Apple might approach TPK, the major panel supplier for previous iPhone models, due to the currently-low yield rates of in-cell touch panels, DigiTimes Research analyst Luke Lin believed that it's less likely that Apple would "go back to TPK's full-lamination process for its next iPhone design, because it would take at least more than a quarter for it to go through various stages of verification."
According to Lin, the next iPhone is now in the PVT (production verification testing) stage.
iDownloadBlog, on the other hand, has taken the report from DigiTimes with a pinch of salt. According to it, "Apple has pretty much announced the next iPhone event through its unofficial mouthpieces, namely Bloomberg, The New York Times and The Wall Street Journal."
Considering that, "why would Apple go to trouble of (unofficially) announcing its fall iPhone event, and have big media put its credibility on the line unless the company is 100 percent positive that its suppliers are able to ramp up production?"
Rumors are rife that Apple would indeed use in-cell touch display technology. In May Taipei Times reported that Sony had joined other display manufacturers like Sharp, Toshiba Mobile and LG for the production of in-cell display panels for the iPhone 5. Last month, The Wall Street Journal backed the information with a report, in which it claimed that the iPhone-maker "will use a new technology that makes the smartphone's screen thinner".
"Japanese liquid-crystal-display makers Sharp Corp. and Japan Display Inc.-a new company that combined three Japanese electronics makers' display units-as well as South Korea's LG Display Co. are currently mass producing panels for the next iPhone using so-called in-cell technology, the people said," said the WSJ report, citing "people familiar with the matter."
The next gen iPhone is highly expected to feature a much-improved processor, a larger 4-inch Retina display, 4G LTE technology, Near Field Communication (NFC), a smaller dock connector, 1GB RAM, iOS 6, improved Siri, liquidmetal casing, an 8 megapixel (or even higher) rear camera, a 2 megapixel front-facing camera for video chatting and a much-improved battery life.