Apple Expected to Spend $9B on iPhone, iPad Displays in 2012

Quickly increasing iPad and iPhone sales will cause Apple's spending on gadget displays to almost double this year.

IHS estimates that Apple will shell out about $9.0 billion for iPhone, iPod and iPad displays in 2012, up from $4.7 billion in 2011. According to the market research firm, a 69 percent shipment increase for the company's smartphones and tablets as well as more expensive technologies will drive the significantly higher expense.

“Apple in 2011 had already established itself as a major purchaser of displays for smart phones and media tablets,” said Vinita Jakhanwal, senior manager for small & medium displays at IHS. “However, combined with continuing strong sales growth of the iPhone, the arrival of the new-model iPad will put Apple’s display-purchasing growth into overdrive in 2012. Along with the high volumes of expected sales, the use of more advanced technology will boost revenue for the iPad screens, increasing Apple’s display expenditures dramatically.”

The new 264 ppi, 2048x1536 pixel QXGA display in the new iPad is believed to carry a substantial price premium over the previous 130 ppi, 1024x768 pixel XGA screen. However, Apple may receive steep discounts as it has invested in display makers LG, Sharp and Toshiba Mobile Display.

IHS said that more than 80 percent of the money Apple spent for iPhone displays were attributed to the 326 ppi, 960x540 QHD pixel display that is used for the iPhone 4/S. Still, the market research firm said that Apple has huge leverage in the market and was able to negotiate price reductions to keep costs under control. IHS also speculated that a new 4-inch screen iPhone will keep a pixel density of about 320 ppi, but jump to a 1024 by 768 pixel format.

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