Apple hasn't announced this year's launch of the iPad 3, but even if it had been going to, it won't now. Apple has "recently canceled its iPad 3 supply schedule for the second half of 2011," according to Taiwan's DigiTimes, partly because Sharp cannot manufacture enough high-resolution LCD screens. These double the number of pixels and provide something like the so-called "retina display" on the current iPhone. "However," DigiTimes adds, "supply of the iPad 2 in the second half will still be maintained at 28-30 million units, according to sources from the upstream supply chain."
The DigiTimes report, Apple cancels supply schedule of iPad 3 for 2H11, says "the 9.7-inch panel that feature resolution of 2,048 by 1,536 may be the major reason of the supply delay since such panels are mainly supplied by Japan-based Sharp with a high price". Apple's other suppliers, Samsung Electronics and LG Display, "are both unable to reach a good yield", it says. Low yields push up prices and constrain supplies.
The high-resolution panels also require more backlighting, and this has an impact on design and battery life. DigiTimes says: "Due to iPad 3's requirements over the physical thinness, rich color support and toughness will all conflict with the panel's technology restrictions; therefore, this could cause a delay in the launch."
Of course, AMOLED displays, as already fitted to many smartphones and digital cameras, are far superior, but still more expensive. Apple seems unlikely to adopt these until the iPad 4 appears, if then. However, a die-shrunk (28nm) A6 processor is expected to appear in the iPad 3 and iPhone 6, and TSMC (Taiwan Semiconductor Manufacturing Co) has already started trial production. (The previous A4 and A5 chips were made by Samsung.)
Apple's standard marketing technique is to produce annual iterations of products so that keen users will buy a new version every year or, at worst, two. Since the iPad 2 only appeared in March this year, the iPad 3 shouldn't be expected until March 2012. This is particularly important because announcing an iPad 3 this year -- inevitably in short supply -- might hurt Christmas sales of the iPad 2.
However, it might simply be that Apple planned to start stockpiling production ahead of a 2012 launch. Since Apple has almost $80 billion in its underused cash pile, having a few million iPad 3's sitting around wouldn't make any financial difference.