As I've said many times in this blog, it's the User-Interface (UI) of the Apple iPad that has a major impact on the electronics supply chain and on how electronic products are designed.
Shipments of Apple’s iPad are set to rise to 20.1 million in 2012, up from 7.1 million in 2010. “Anyone that wants to compete with Apple is going to have to consider the design of the iPad, as well as its huge implications on the electronics design and value chain,” said Lidow. “This unleashes an extremely interesting dynamic. The question of which companies in the supply chain will capture the profits from this UI-based approach will be of major importance in the coming years.”
Display and touch screen patent issues
Obvious beneficiaries of the UI-centric design philosophy are the suppliers of the display, touch screen assembly and related electronics. The display module in the iPad, supplied by LG Display, is the single most expensive component in the product. The display employs advanced, wide-viewing-angle LCD technology. The actual technology reportedly is either In-Plane Switching (IPS) technology or Advanced-Fringe Field Switching (AFFS) technology. LG Display holds the patent for IPS, while Hydis Technology Co.—a subsidiary of Prime View International—holds the patent on the AFFS technology. Japan’s Epson is also providing panels, while Samsung Electronics is a potential future supplier.
The next most expensive component is the capacitive touch screen assembly. The supplier of the assembly is Wintek while other makers of such assemblies include Sintek Photronic, TPK Solutions, Touch International and Young Fast Optoelectronics, but none of those companies currently supply to the iPad, iSuppli believes.
On the support electronics side are the touch screen microcontroller and multitouch controller Integrated Circuits (ICs) from Broadcom and the touch screen driver from Texas Instruments. Other suppliers for touch screen controllers not specific to the iPad include Synaptics, Cypress Semiconductor, and Atmel.
Interestingly, the fact that three separate ICs are used to support the touch screen display indicates that the design is in its early stages, and suggests that future integration into a single device is possible and desirable. Future versions of the iPad are likely to use a single-chip solution for supporting the touch screen functionality, creating opportunities for suppliers that can offer such products.
“The iPad brings a new competitive dynamic that focuses on which companies will supply and control the value of the UI—and which firms will become commoditized in the relentless push to drive down prices,” Lidow said. “Display companies could shift their R&D priorities to develop touch and UI intelligence into their products, grabbing value from other UI components and protecting them from being commoditized. Intellectual-Property-savvy semiconductor suppliers could do the same. During the next five years this will become one of the most important battlegrounds in the electronics value chain.”
Battery charge
While the battery is not usually considered part of the UI, in the iPad it plays a critical role in supporting the user experience. With the iPad heavily focused on mobility, a long battery life is critical, as iPhone users know.
“The weakest link in the iPhone is the battery life,” said Andrew Rassweiler, director and principal analyst, teardown services manager, for iSuppli. “With the iPad, Apple has rethought design priorities to ensure long battery life and serviceability. The bulk of the iPad is designed to accommodate the battery pack, which was also designed to be easily removed and replaced, although not by consumers.”
The thickness of the iPad is largely determined by the size of the display module and battery packs combined, Rassweiler noted. The battery, priced at $23.75, represents more than 9 percent of the iPad’s total bill-of-materials cost. In the iPad torn down by iSuppli, the battery cells were supplied by Amperex Technology and the pack provided by Dynapack.iSuppli expects other suppliers of tablet-type products to emulate the iPad’s battery-centric approach.
Processor concerns
In the UI-focused, content-consumption-oriented iPad, the microprocessor plays a lesser role than it does in conventional notebook PCs. However, the iPad’s design demands a highly integrated microprocessor that emphasizes lower power consumption and small space usage.
The microprocessor, combining an A4 processor core and a Graphics Processing Unit (GPU), was designed by P.A. Semi—which was acquired by Apple in 2008—and carries an estimated cost of $19.50.
“The processor in the iPad is not a PC microprocessor,” Rassweiler said. “This is, as we understand it, an ARM-core based processor that is different from—and not trying to compete with—for example, Intel’s Atom microprocessor. This is a totally different architecture that comes as more of an extension of the iPhone/iPod line, rather than as an extension of Apple’s computer line-up, which is entirely Intel-based at this point.”
While the A4 lacks a custom development tailor-designed by, and made only for, Apple, it provides a much smaller physical footprint than Atom architecture does.
Know-how in integrated silicon for mobile platforms is now in hot demand because of the iPad’s design and may be behind several developments in the news lately.
These developments include Google’s recent announcement of its acquisition of Agnilux, a start-up founded by P.A. Semi professionals who left when that fabless chip designer was acquired by Apple in 2008. Agnilux Intellectual Property (IP) could find its way into a pending Google tablet PC. Apple this week also reportedly purchased Intrinsity, a privately owned ARM chip design firm.
Some competitors of the iPad are likely to also adopt ARM-Core based designs, such as the TEGRA chip line by Nvidia, or the OMAP processors by TI.
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