Apple's investment of US$1 billion into Sharp's LCD manufacturing plant in Kameyama, Japan, is "highly possible" and will help ensure Cupertino a supply of display screens for its iPhones and iPads, according to a sales note. The move is also deemed as a way for Apple to reduce its reliance on another supplier Samsung with which it has an ongoing patent spat.
In a report Wednesday, Reuters cited a sales note written by MF Global FXA Securities in which analyst David Rubenstein said: "We think it is highly possible that Apple will make an investment in Sharp's Kameyama plant to the tune of around US$1 billion in order to secure a stable supply of screens for iPhones and iPads. This would have a material impact on Sharp's profitability."
Other sources said the investment, along with a similar one in a new Toshiba factory, also in western Japan, was driven by Apple's desire to lessen its dependence on Samsung Electronics with which it has an ongoing patent dispute, according to Reuters.
Samsung supplies Cupertino various components from LCD panels to mobile processors and flash memory.
Both companies have traded legal barbs in recent months since Apple sued Samsung in the United States in April over intellectual property violations of its mobile device designs. Samsung retaliated with a countersuit against Apple.
Local Japanese media since late 2010 reported the likelihood Apple would invest 100 billion yen (US$1.3 billion) investment in Sharp, noted Reuters. Sources added that Sharp had clinched a contract with Apple to supply power-efficient screens for latter's sixth-generation iPhone, slated for launch in 2012.