Growing pains for new touch-sensor technology in latest iPhone, iPad

Analysts say the new touch sensor technologies in Apple's iPhone 5 and iPad mini are expensive to manufacture but enable their thin industrial design.

Analyst company NPD DisplaySearch offers a look at Apple's latest touch devices in its recently-released 2012 Touch Panel Market Analysis report. The analysis confirms some previous rumors about manufacturing issues with the new iPhone and iPad screens.

The iPhone 5 uses in-cell touch technology, and the iPad mini a DITO (dual ITO) film technology. Both technologies are suffering from ramp-up issues, DisplaySearch confirms.

Apple sources the 4” 1136-by-640 (326 ppi) in-cell touch LCD from LG Display, Japan Display Inc., and Sharp under a license to use Apple’s in-cell touch patents. Under the terms of the agreement, these panel makers are not allowed to sell LCD panels of any size using Apple’s in-cell touch patents to other companies. Limited production along with the challenges in producing the new sensors with strict performance requirements have resulted in poor yield rates (70-80 percent or less) in the LCD panel manufacturing. These challenges have also led to a higher price for in-cell touch.

DisplaySearch said that there were production issues with the DITO film and lamination. In addition, aligning the sensors on film is more difficult than with glass, the report says. The iPad mini is the first tablet to use the DITO film touch sensor.

These challenges have resulted in low production yield rates, which have been a contributor to the higher entry price of $329 for the iPad mini. Other tablet PCs which are less expensive, use glass sensors or a one-glass solution with optical bonding.

"In-cell touch and DITO film offer some clear advantages, but at the expense of lower yield rates and higher costs—at least in the early stages of production," added Hsieh. "Apple has concluded that the benefits of thinner, lighter devices will be highly valued by consumers."

Certainly, the cost of these screens will fall quickly, improving Apple's margins.