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Talk of the Day -- Taiwan suppliers to benefit from iPhone 6 launch

2014/04/15 20:05:52

Apple Inc. reportedly is negotiating with wireless carriers to increase the price of its upcoming iPhone 6 by US$100 (about NT$3,000), mainly to reflect higher costs of some components.

These components include a larger and more pixel-packed display, longer-life battery, sapphire glass screen protector and liquid metal case, an analyst said.

The Economic Daily News reported the new iPhone and its Taiwan connections as follows:

Taiwanese battery suppliers and companies like Foxconn Precision Components Holding. Ltd., the major manufacturer of metal cases for Apple's mobile phones; Hon Hai Precision Industry Co., the assembler of iPhones and iPads; and Taiwan Semiconductor Manufacturing Co., Ltd. (TSMC), which reportedly is producing chips for the iPhone 6, are expected to benefit considerably from the launch of Apple's new phone, according to the analyst.

The iPhone 6 display will be supplied by Japan Display, Inc. (JDI) and the sapphire screen by U.S.-based GT Advanced Technologies (GTAT).

"Our checks indicate that Apple has started negotiating with carriers on a US$100 iPhone 6 price increase," Jefferies analyst Peter Misek said in a report. "The initial response has been no, but they (the carriers) may not be able to resist as the iPhone 6 is shaping up to be 2014's blockbuster handset."

Because the iPhone is the only phone that matters this year, carriers and consumers may cave in and give Apple the price bump it wants, Misek added.

Apple's iPhone 6 is likely to hit the market as early as June, offered in 4.7-inch and 5.5-inch display sizes, with the 4.7-inch model being the mainstream and the 5.5-inch model designated as the replacement for the iPad mini.

Total shipments of the iPhone 6 this year are estimated to reach 68.8 million units and Hon Hai is likely to be a big beneficiary in the supply chain, an industry expert said.

Mass shipment of the 4.7-inch model is expected to start in September, with the total shipments this year estimated at 60 million units, the expert added.

The 5.5-inch model will be launched later in view of its high price, and its shipments this year are estimated at 8.8 million units.

With its bigger screen, the iPhone 6 is likely to spur demand among consumers who want to change their mobile phones, which will help Apple maintain its leading status in the high-end smartphone market, according to the expert.

In related news, Paul Peng, president of AU Optronics Corp. (AUO), one of the world's top manufacturers of TFT-LCD panels, said China's panel production capacity is expected to surpass Taiwan's in 2015, making China the world's second largest panel maker.

This development, along with China's plan to raise import tariffs on panels to 10 percent, would pose a threat to Taiwan's panel manufacturers, Peng said.

Under such circumstances, representatives from the industry and the government have been urging a merger between AUO and Innolux Display Corp. to boost Taiwan's panel industry's competitiveness by integrating the resources of the two panel makers.

But Peng said it would be difficult for the two companies to complement each other and that is why they have not moved toward such a merger. (April 15, 2014)

(By Evelyn Kao)