Will Apple Up Prices For Touch Panels To Squeeze Competition ?

[Written by : Linda - iPad.net Editor]


Apple has already cornered the market on touch screens, and now in the wake of the disaster in Japan, the company may be making it even harder for rivals to get the supplies they need.

Apple already controls 60% of the entire touch screen market, and could be increasing that percentage soon. The earthquake and tsunami that struck Japan a few days ago has shut down some plants producing components for Apple products including the iPad 2. With stock in short supply and an international launch on Friday, this is a crucial time for the Apple tablet, and the company is taking steps to insure the iPad 2s keep coming.

According to a report by DigiTimes, Apple is upping the price it will pay for touch panel screens to ensure it will get the components necessary to continue producing the iPad 2. This is very bad news for the makers of competing tablets, who will have to pay higher prices and fight each other for the dwindling supply of touch screens.

DigiTimes reports Apple is particularly zeroing in on suppliers in Taiwan to take up the slack until the Japanese plants are up and rolling again—which could take months. 2011 was expected to be a huge year for both tablet computers and smartphones, with new models hitting the market throughout the year. These component shortages could seriously affect the ability of all makers of these devices to provide sufficient inventory.

Apple has always used its position of power to get first dibs on anything they need, and outspend competitors when necessary. The company will find some way to meet the demand for iPad 2s, but smaller rivals will be hard pressed to compete for the smaller pool of available components. You can’t make a tablet or a smartphone without a touch screen, and things could get rough for Apple’s competitors over the next few months.