iPad 2 shows Tim Cook is Apple's new ninja

While Apple [AAPL] gossips watch Steve Jobs’ first ever TV appearance (below), the Wall Street Journal (WSJ) last night confirmed many of my predictions for the iPad 2.0, while Apple drives the display industry to meet massive demand for high-resolution displays for mobile devices. Apple COO Tim Cook has also used his skills in inventory and supply management to create critical barriers to limit the impact of competitors in the space.

Component suppliers are already seeing strong returns for their part in the Apple ecosystem, with display manufacturers especially thrilled. That’s because spending on new plant for the manufacture of low temperature polysilicon (LTPS)-based displays is going to reach a record $2.4 billion in 2011, DisplaySearch has said.

Above: A young Steve Jobs prepares for his first-ever TV appearance.

LTPS manufacturing processes are used to produce screens for iPhones, iPads and other mobile devices. The iPhone 4’s LCD-based 'Retina Display' requires LTPS. Apple found it too challenging and expensive to produce high-res Retina Displays for inclusion in iPad 2.0, manufacturing of which has already begun, the WSJ said.

Apple's connected connection

Samsung also uses AMOLED displays in its Samsung phones. "The success of Samsung's AMOLED-based Galaxy phones and Apple's LCD-based iPhone 4 have pushed the performance standard of high-end mobile displays to a level that currently only LTPS can meet," said DisplaySearch VP  Charles Annis.

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Supply of both AMOLED and LTPS LCD screens will be tight this year, meaning we shouldn't expect Retina Displays to reach the iPad (or, indeed, Apple's soon-to-be-updated MacBook range) until next year.

Apple's alliance with Samsung means it has already tied-up over half that manufacturer's mobile processor production.

Could Apple be engaged in a similar alliance to secure the lion's share of LTPS production facility? Perhaps some of Apple's recent $3.9 billion strategic investment? I'm aware many consider Apple's entire investment has been in display technology, but at $400 per device Apple would need to sell ten million iPads before that component investment alone was covered.

I feel it is far more likely Apple's guidance has quietly served to misdirect industry watchers to focus on one component category, when the company has instead made several strategic investments, perhaps in: the graphics technology, processor manufacturing, memory supply and display production.

"Not only is the number of new LTPS-related investments extraordinary, but leading panel makers are for the first time ever scaling LTPS technology to 5.5G and larger substrates," Annis tells Digitimes.

If we need any further confirmation that Apple is driving this industry direction, Annis adds, "The higher cost of specialized tools used to fabricate LTPS on large glass is also a significant contributing factor."

"Large glass"?

Analysts predict tablet PC sales will reach 55.7 million units in 2011. Smartphone sales have already exceeded PC sales, IDC says. Apple is expected to introduce a 10-inch iPad, but speculation continues to claim the company may also ship a 7-inch device (not marketed as an iPad -- an eReader, perhaps?).

Tom Mainelli, an analyst for IDC told PC World, "Our sources say Apple has requested that manufacturers begin work on displays with that resolution for the iPad 3. I don’t believe anybody is ready to produce that resolution in volumes at this point. And Apple is going to require huge volumes for the iPad 2."

What can we expect from the next-gen device?

"The new iPad will be thinner and lighter than the first model, these people said. It will have at least one camera on the front of the device for features like video-conferencing, but the resolution of the display will be similar to the first iPad," the WSJ writes. I'd anticipated as such.

The report also tells us that the next-gen tablet will be available through Verizon and AT&T -- a clear hint that both CDMA and GSM versions will be made available. It isn't clear yet if different iPad versions will be made available, or if we will see both GSM and CDMA supported on one device.


[IMAGE ABOVE c/o iFixIt]

It seems likely: Apple may need to engage in further development of the antenna to enable this, but an iFixIT report confirms the Qualcomm communications chip used in the Verizon iPhone could conceivably support both CDMA and GSM networks.

"This is the same chipset as the Droid Pro world phone. It supports both GSM and CDMA—which means that Apple could have supported GSM," iFixIt writes.

I consider it possible Apple will support both GSM and CDMA within the iPhone 5 and iPad 2.0, both of which will also field faster chips, better graphics and more memory/capacity.

Facetime for the iPeople

The next iPad will also boast Facetime support with its (not especially high-res) front and rear-facing cameras. Here's a video showing Apple's Facetime beta functioning (to an extent) on a current-generation iPad.

Apple has sold 14.8 million iPads since April 2010. In the last quarter, the product poured $4.6 billion into Apple’s well-stocked coffers. Enterprise purchases will account for 10 million tablets next year, according to Deloitte. The majority of these will be iPads.

Gartner expects tablet sales will reach 55 million units this year, up 181 percent. These will reach 154 million next year. Apple is expected to grab around 70-80 percent of this market, though its share is predicted to fall to just over 50 percent the following year.

Apple's new ninja -- Tim Cook

Apple’s strategic investments are classic Tim Cook. An expert in logistics, supply management and inventory, Cook is putting up massive barriers to challenge competitors attempting to take on the iPad. While Jobs places his focus in product design, Cook has proved himself an expert in supply and production management. In the right hands, command of business systems is a lethal weapon. As they are in this case...

This is because Apple's investments aren’t just about ensuring it can ship its devices in sufficient quantity. They also serve to create cost and component acquisition barriers to competitors attempting to take a slice of the burgeoning industry. (As I predicted).

This barrier to entry is also psychological:

HP, RIM, HTC, Dell, Motorola and many others intend launching their own tablet devices this spring. You saw 100 prototypes take a bow at CES this year. But all these devices only manage to emulate what Apple’s existing device already does. This means Apple will introduce its next-gen device even as first-gen imitators reach market, underlining its own innovation in contrast to their imitation.

Apple’s also applying economies of scale:

Even if competitors can develop attractive machines, even if they can create developer ecosystems, even if they can match Apple’s device on features they remain challenged to match its offer on build quality and price. Every poorly-made Android device that disappoints a consumer will tarnish to the credibility of Apple’s competition just a little more.

What do you think? Let me know in comments below. I'd also very much like to invite you to follow me on Twitter so I can let you know when I post new reports here first on Computerworld. (And I'll tip you off with breaking Apple news, too). Signing off, why not take a look at Victoria Beckham’s $32,000 gold-plated iPhone 4?

Copyright © 2011 IDG Communications, Inc.

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