Wednesday, January 20, 2010

Apple “Tablet”: Initial thoughts on likely suppliers

•Apple announcement Jan 27th: Tablet likely Apple sent out last Monday an invitation for an event on January 27th. Apple UBS analyst Maynard Um believes that the Apple tablet is on track to roll out in 1H10. As the event invite says “come and see our latest creation”, this may point in the direction of the Tablet. An Apple Tablet rollout being expected, key will be timing and price points, in order to asses how material it could be for suppliers. In addition, how convincing the device will be could generate debate as per whether the tablet device category could be revived and help overall demand

•We believe Hon Hai will manufacture; LGD to provide panel Our checks suggest that Hon Hai might manufacture the Tablet for Apple. We believe the display will likely come from LG Display, although AUO could be second source. We believe Chen Uei and Hon Hai cold be connector suppliers; Wintek, Sintek and TPK touch suppliers; Simplo and Dynapack battery suppliers.

•CPU to be Apple’s; Samsung could gain high-profile foundry customer We believe the application processor will be PA Semis (i.e. Apple’s) with Samsung the likely foundry – thereby gaining a “high profile” customer with a likely complex SoC. We see likely high embedded NAND Flash use (likely Samsung). We believe connectivity will likely be provided by a Broadcom combo.

•Positive on Apple and select related exposure We rate Apple, Hon Hai, Samsung and LG Display Buy.

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