Apple recently revealed that it’s making a $4 billion investment over the next two years for “inventory component prepayments and capital expenditures.”
Many conclude this is a big bet on display technology.
Is that because Apple may soon go head-first into the TV business?
A note released today by iSuppli says Apple is betting big to “guarantee availability of advanced liquid-crystal display (LCD) panels for its iPad and iPhone lines.”
Specifically, iSuppli believes Apple has established agreements with LG, Sharp, and Toshiba for supply of Apple’s retina display, including technologies called IPS (“in-plane switching”) and LTPS (“low-temperature polysilicon.”)
As Fortune’s Philip Elmer-DeWitt notes, Apple isn’t just buying displays ahead of time, it’s helping build the factories that make them.
We have no doubt that much of Apple’s focus here is for its portable gadgets, such as the iPhone, iPod touch, and iPad, which represent Apple’s future (and a huge portion of its revenue and profits).
But might a move into the TV business also play a role in Apple’s investment?
For example, IPS technology, as Apple describes on its website, makes displays “look great from almost any angle.” That’s a nice feature on the iMac and the iPhone. But it would make a really great selling point for an Apple television.
If Apple does eventually enter the TV industry, as many expect it will, it won’t be there to compete on price — it will compete with better software and better technology. Could this $4 billion bet be one of its first steps?