Supply constraints have become something of a recurring theme for Apple (NASDAQ:AAPL), as the company pursues increasingly complex manufacturing processes while also balancing its relationships with numerous component suppliers. The iPhone 5 in particular remains heavily constrained, with new orders placed on Apple's website still being quoted shipping times of three to four weeks. For the newest model in Apple's most important product family, those shortages could easily hurt overall results.
Last month, NPD DisplaySearch analyst Richard Shim predicted that iPad mini supply would initially be constrained by display yields, suffering the same fate as the iPhone 5. Part of this theory was based on the belief that Apple was only tapping two display suppliers, LG Display (NYSE:LPL) and AU Optronics (OTC:AUO), with the latter being relatively new to the game and working to ramp up to adequate volumes.
Importantly, Shim told CNET that he believed Samsung would not be supplying any displays for the iPad mini, notable because Samsung has long been a key display supplier for Apple. Tensions between Apple and Samsung have been high lately, what with an ever-escalating global patent war and relentless competition between the two. There was a report last month from The Korea Times saying that Samsung was looking to end its LCD supplier relationship with Apple next year, a report that Samsung subsequently denied.
iFixit has just received a unit and immediately torn it to pieces, as usual. While there weren't any particularly promising component investing opportunities lurking inside, there was another interesting revelation: Samsung is providing displays. Shim's initial estimates based on only two suppliers added up to approximately 9.1 million units through year's end, but if Apple has indeed tapped Samsung, contrary to popular belief, then that would reduce the chances of the iPad mini running into shortages.
We can't say for sure how production is being allocated, but Samsung has massive scale and can churn out displays with the best of them. In the past, Samsung and LG have frequently split production about equally. If Apple invited Sammy to the iPad mini party, there may be plenty to go around.