Is Apple Slimming Down?

The next iPhone may be almost half a millimeter slimmer than the last and the change in manufacturing technology leading to it may also be helping Apple (NASDAQ:AAPL) bring down production costs.

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A report by KGI Securities analyst Ming-Chi Kuo says Apple will introduce in-cell touch panels on its next iPhone. The new design will basically embed the touch sensor within the liquid crystal display, shaving off 0.44 mm from the phone’s thickness by removing the separate touch sensor layer and a layer of adhesive. Kuo says that if a thinner battery is used and Apple also switches the back to a metal material instead of glass, the thickness could go down by an additional 0.96 mm. The iPhone 4S is 9.3 mm thick and Apple wants to break the 8 mm mark to stay close to competitors who are coming up with sleeker phones.

Kuo added that in-cell technology will help Apple add efficiency to its supply chain management and improve production yields. Since the new assembly will need to bond only three semi-finished items, compared to the six required for the iPhone 4S, production procedures and time required will also be cut down. Production costs can be brought down by an estimated 10 percent to 20 percent, Kuo adds.

Toshiba, Sharp, and LG Display (NYSE:LPL) are likely to benefit from orders of in-cell touch panels by Apple.

Meanwhile, the company has finally managed to bring down estimated shipping times for the new iPad. Orders of the third-generation iPad on Apple’s official site are now listed to ship in less than 7 business days for all specifications and colors. Online shipping estimates had gone up to one to two weeks as Apple sold out of preorders and struggled to keep up with demand. The tablet sold a record 3 million units over its launch weekend.