Citing industry sources, DigiTimes claims that the iPad mini’s relatively high entry price is due to the low yield rates of the touchscreens used in the device.
Apple is reportedly using a new touch screen technology in the iPad mini called “GF Ditto,” (also known as GF2) which enables the device to be much thinner and lighter. This does, however, come with its own share of production issues, translating into low yield rates.
From DigiTimes’ report:
The sources said the DITO film sensor is having mass production issues, which has been a big contributor to why the device is approximately 40-50% more expensive compared to other 7-inch tablets that have OGS or G/G structures.
The sources said that GF2 touch screen modules are only about roughly US$5 cheaper than G/G ones for the 9.7-inch iPad models.
The report adds that the iPad 2 will remain on sale at least till the first quarter of 2013, largely because the two generation old model still enjoys a steady demand.
While Phil Schiller justified the relatively high price of the iPad mini arguing that consumers are willing to pay a premium for a superior experience, Apple would have liked the price to at least crack the $300 psychological barrier. DigiTimes’ theory does explain why Apple was forced to price the iPad mini at an awkward figure of $329.
DigiTimes’ track record has been questionable in the past, but the publication did accurately predict the iPad 4, way back in January this year, suggesting that they are in touch with the right people when it comes to iPad related information. Besides, the use of “GF Ditto” technology had also been noted by KGI Securities analyst Ming-Chi Kuo in a research note in August, which said that difficulties in mass producing touch screens based on this technology had delayed the iPad mini’s release date.