Supplier constraints could hamper shipments of iPad mini

Apple's iPad mini made a splash during its unveiling on Tuesday and is expected to create a shipment bottleneck when it debuts next week.

Pre-orders for the iPad mini and the fourth-generation iPad will likely snap up much of Apple's initial supply, thanks in part to the new tiny tablet's £269 price tag, DisplaySearch analyst Richard Shim wrote in a blog post.

"Panel supply chain indications point to an even more than typical tightness in the market for the iPad mini," Shim said.

Apple took some precautions, though. While the company will continue to work with LG Display, which supplies panels to Foxconn, it has also recruited AU Optronics to distribute panels to Pegatron, Shim wrote. Still, yield issues with the 7.9-inch panel are limiting AUO's supply, Shim said.

AUO shipped only about 100,000 units in September, but Apple's production goal is set at 400,000 units this month, 800,000 in November, and another 1 million in December, DisplaySearch reported. So far, LG shipped 300,000 panels last month, and plans to send another 1 million in October, working up to 2.5 million next month, and 3 million by the end of the year.

Apple did not immediately respond to a request for comment.

As Shim pointed out, Samsung has been a long-time leading panel supplier for the iPad, but the company seems to be slowly pulling away from Apple, likely over legal conflicts. Earlier this week, there were reports that Samsung will cut all liquid crystal display (LCD) ties with Apple. A spokesperson said in a statement, "Samsung Display has never tried to cut the supply for lcd panels to Apple."

Less than 24 hours after the big reveal, the iPad mini is already being cheered and jeered by technology reviewers and analysts, some of whom believe "the whole competitive landscape of tablets just got turned upside down," according to Piper Jaffray's Gene Munster.

Others argued that the device provides "just incremental improvements, nothing ground breaking," suggesting "the best is over for Apple," according to Trip Chowdhry, managing director of Equity Research.

For more, see hands on with the iPad mini and hands on with Apple's new iPad 4th generation.