Yes, those much-discussed iPhone component cuts were real, but they came not because of lowered demand but because Apple (NASDAQ:AAPL) decided to make changes to its supply line. That argument has been made by Trip Chowdhry of Global Equities Research, who wrote in a research note that worries about iPhone production, which resulted in the stock dropping below $500 earlier this week, had been overdone.
According to Chowdhry, Apple was, in fact, in the process of transferring from using traditional displays for its mobile products to IGZO screens, which are made of a compound semiconductor and “get days of standby despite greater brightness and resolution, thanks to lower battery use.”
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Apple has long been rumored to have invested in Sharp, which pioneered the new technology. The analyst met Sharp executives at the Consumer Electronics Show, where the display maker showed off the first IGZO-based smartphones that are now being sold in Japan.
“Based on our discussions with technologists at [various display] conferences, here is the converged view we got: Apple cut LCD orders by 40 percent to 80 percent not because the demand has declined by 40 percent to 80 percent but probably because Apple is shifting to IGZO (Indium Gallium Zinc Oxide) display technology,” Chowdry wrote, according to Barron’s. “IGZO is ideal for large TV panels; IGZO is also ideal for flexible displays such as in the new iPhones, iPads and MacBooks; IGZO has 40 times faster response time than today’s LCD TVs.”