Reports that Japan’s Sharp Corp. has failed to start shipping screens for the newest iPhone are just the tip of what could be a very sharp iceberg for Apple. While Apple has other suppliers for the upcoming iPhone’s LCD screens, it relies on Sharp for the displays for several existing products, including the iPad. Sharp is in serious financial trouble, and that could force Apple to do some last-minute scrambling ahead of next week’s anticipated iPhone 5 launch. It could also be good news for companies like South Korea’s LG Display that also make screens for Apple.
On Friday, Standard & Poor’s downgraded Sharp’s debt to “junk” status, citing concerns about the company’s liquidity position. The Japanese giant is looking to Taiwan’s Hon Hai Precision Industry Co. Ltd. for a bailout; the two companies have been in talks about a partnership that would give Hon Hai almost 10% of Sharp. But on Friday, Hon Hai’s chairman left Japan without news of an agreement, sending Sharp’s stock into a freefall.
The newest version of the iPhone is expected to debut September 12 with a new 4-inch screen using “in-cell” technology. This technology makes for a thinner screen by embedding touch sensors into the liquid crystal display (LCD). LG Display and Japan Display are two other companies are already said to be shipping the screens for the new iPhone.
If Sharp has indeed fallen behind on screen production, it is not an unfamiliar problem for Apple. Displays for the new iPad were delayed by Sharp earlier this year, but Apple still managed to meet demand for the wildly popular device.
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