iPad's Innovative Design Expected to Revolutionize Electronics Supply Chain

May 5, 2010
There's no doubt about it: Apple Inc.'s iPad is unique. And it's innovative User-Interface (UI)-focused design has analysts predicting a complete shake up of the global electronics supply chain. "Electronic products have always been designed the same ...

There's no doubt about it: Apple Inc.'s iPad is unique. And it's innovative User-Interface (UI)-focused design has analysts predicting a complete shake up of the global electronics supply chain.

"Electronic products have always been designed the same way, with a motherboard-oriented approach starting with the circuits and semiconductors on a central Printed Circuit Board (PCB) and then wrapping UI-focused elements like the keyboard and display around it," says Derek Lidow, president and chief executive officer at iSuppli in a press release. "The iPad is not designed that way. It doesn't have a traditional motherboard. Rather, it is designed with the UI as the starting point: Apple started by designing the screen, the touch pad and the battery, and lastly focused on the semiconductors and where to put them. This design is what gives the product a unique feel and functionality."

If you're curious about the details behind this new UI-focused design, check out iSuppli's Teardown Analysis, availablehere.

Also, thanks to Michelle Maisto's post at eWeek.com, I found this link to eWeek.com's slideshow of an iPad teardown.

According to iSuppli, obvious beneficiaries of the UI-centric design philosophy are the suppliers of the display, touch screen assembly and related electronics, including LG Display, Epson, and Samsung.

"The iPad brings a new competitive dynamic that focuses on which companies will supply and control the value of the UIand which firms will become commoditized in the relentless push to drive down prices," Lidow says. "Display companies could shift their R&D priorities to develop touch and UI intelligence into their products, grabbing value from other UI components and protecting them from being commoditized. Intellectual-Property-savvy semiconductor suppliers could do the same. During the next five years this will become one of the most important battlegrounds in the electronics value chain."

In addition, iSuppli expects suppliers of capacitive touch screen assemblies, tablet-type product batteries, and new highly integrated A4 microprocessors to be significantly impacted by the success of the iPad and by the rush of manufacturers hoping to compete with it.

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