Apple and Sony Join Forces for iPhone 5?
Because it's fun to work with your competitors!
Taipei Times reports (AppleInsider) that Stone Wu, a senior analyst with IHS Displaybank, has stated that Sony (NYSE: SNE) began mass producing in-cell touch panels last February. But instead of using the panels exclusively for its own line of smartphones, Sony began mass production to supply Apple (NASDAQ: AAPL) with a large number of panels for the upcoming iPhone 5.
Apple already works with some of its competitors, including Samsung, to build parts for its most popular devices. If the analyst is right, Apple will add yet another competitor to its supplier list.
The benefits that Sony may bring, however, could be worth the alliance.
"In-cell screen tech allows for thinner smartphones because its design embeds the display's capacitive touch sensors into the LCD filter array rather than stacking two components on separate pieces of glass," AppleInsider explains. "Due to the technology's complexity, however, the average fabrication yield is relatively low, which has forced Apple to secure the components from a number of suppliers."
Alliance Today, Problems Tomorrow?
Thus far, Apple has had success in joining forces with its most lethal competitors, including those it has taken to court over patent infringement. Meanwhile, Samsung is more than content to supply Apple with all of the displays it needs. The Galaxy S III manufacturer wants to be the world leader in smartphone production, but it also wants to profit in any way that it can. By helping Apple, it can do just that.
However, you have to wonder what might become of these alliances as the patent wars heat up. Thus far, Apple has not had much of a problem with Sony, which might be part of the reason why the two are willing to work together. But if Samsung suddenly decided to pull its supplies -- either in retaliation over a patent issue or to cripple Apple's supply chain -- Apple could be seriously hurt. The company is credited with having the best supply chain in the world. But that chain can only function with the help and cooperation of its suppliers.
In the event that Samsung or any other manufacturer bailed, Apple could surely find a replacement. But that could take time. If a supply disruption occurred during the launch of a new device (such as the iPhone 5 or the still-unconfirmed Apple Television), it could pose quite a threat to the company's bottom line.
Follow me @LouisBedigianBZ
© 2014 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.