Tablet Panel Shipments Fall in April as Apple Cuts Purchasing

26 June 2013

Tablet panel shipments fell in April as Apple Inc., concerned about decreasing market share, slashed orders by a sizable margin for the screens that go into its iPad, according to the latest LCD Industry Tracker - Tablet report from information and analytics provider IHS.

Shipments of large-sized liquid-crystal display (LCD) panels used in tablets amounted to 21.5 million pieces in April, down 2 percent from 21.9 million pieces in March. The decline comes after a notable 19 percent upturn in March that raised tablet panel shipments to their highest monthly level ever.

Despite the contraction, the April figure represented a stunning 140 percent surge from tablet panel shipments the same time a year ago of 8.8 million pieces, posted back in April 2012. In fact, triple-digit-growth has been the norm so far for each month since the year started. Compared to same-month levels a year ago, tablet panel shipments climbed 146 percent in January, 157 percent in February and 231 percent in March, with the April increase continuing the pattern.

Apple still has the power, but challenges spring up

The decrease in tablet panel shipments during April was largely due to Apple, whose power to sway the market remains undiminished. In this case, Apple chose to cut orders from its largest supplier, LG Display of South Korea, by more than 40 percent, resulting in a general decrease for the tablet panel market. From 5.4 million units in March, Apple in April brought down purchasing from LG Display to 3.2 million pieces, which included units for the 7.9-inch iPad mini as well as the 9.7-inch regular iPad. 

Apple's move came out of concern for its current tablet inventory, IHS believes, and after its share of the global tablet market fell to 30 percent in April, down from 38 percent in March. Apple is likely also cutting orders for the iPad mini panel, according to sources in the supply chain. 

Along with Apple's loss of share in the tablet market, the company's competitors have become more aggressive in launching rival offerings. In particular, smartphone makers in China are muscling into the tablet space not only with a flood of low-cost tablet panels being supplied by second-tier panel makers but also with turnkey solutions from Asian applications processor makers.

Illustrating their gathering strength, share of this group of undifferentiated Chinese players-who make up the "Others" category of tablet panel suppliers-rose to a collective 40 percent in April, up from 32 percent in March.

Winning panel sizes and players

Among panel sizes, the 7.0-inch commanded the largest market share in April, up 6 percentage points in shipments to 43 percent, with white-box pieces making up more than three-fifths of the 7.0-inch segment..

Coming in second was the 7.9-inch panel utilized by the iPad mini, which fell for the third consecutive month in April to 16 percent, down from 22 percent. In third place was the 8.0-inch panel found in new Samsung and Acer tablet models, up 6 percentage points to 11 percent.

The largest tablet panel supplier in April was Taiwanese-based CPT, thanks to clearance sales of its panels for the lower-priced secondary tablet market. CPT's share jumped to 22.4 percent, up from 14.7 percent, propelling the maker to the top from the No. 3 spot a month earlier.

Following closely behind was Samsung Display Co. with a stable 21.7 percent share, maintaining its No. 2 ranking. While main rival LG Display sold fewer tablet panels to Apple in April, Samsung Display in its role as a second source managed to increase shipments of 9.7-inch panels to Apple.

Meanwhile, the top supplier in March-LG Display-fell to third place with a tablet panel market share of 18.0 percent, down from 30.6 percent-a distinct casualty of the Apple affair.

Read more >> Apple Slows iPad Mini Procurement from LGD

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