New In-Cell Touch Display Blamed for iPhone 5 Shortages

Production challenges with the new in-cell touch panels for the iPhone 5 are being blamed for supply shortages, according to Bloomberg.

Making a thinner, lighter iPhone meant even the display had to be thinner. Apple engineers accomplished that by creating the first Retina display with integrated touch technology. Which means instead of a separate layer of touch electrodes between display pixels, the pixels do double duty - acting as touch-sensing electrodes while displaying the image at the same time. With one less layer between you and what you see on iPhone 5, you experience more clarity than ever before. All on a display that's 30 percent thinner than before.

Barclays reports that Apple enlisted Sharp as a supplier for the display; however, the company is struggling to reduce production defects in the screen and thus was unable start shipments before the iPhone debuted. LG and Japan Display are also having trouble manufacturing fast enough to meet demand.

"Apple is facing significant production constraints due to a move toward in-cell display technology," Ben Reitzes, an analyst at Barclays, wrote in a research note yesterday. "Apple is struggling to keep up with demand."

"It's a problem that everybody else would love to have," Dinges said. "Even if you are going to run in to some areas where there are supply shortages, Apple is going to to get a disproportionate amount of the available supply -- they are your best customer."

Pre-order shipping times for the new device have now slipped to 3-4 weeks.

Read More