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Sat, Nov 21, 2009 - 01:43 AM EST  —  AAPL: 199.92 (-0.59, -0.29%)  |  NASDAQ: 2146.04 (-10.78, -0.5%)

South Korea’s LG signs 5-year LCD supply deal with Apple, nets $500 million advance
Monday, January 12, 2009 - 05:00 PM EST

"South Korea's LG Display said it had signed a deal to supply LCD panels to Apple Inc. for five years," Marie-France Han reports for Reuters.

"The world's second-biggest maker of LCD screens did not disclose the total size of the deal but said in a filing to the Korea Exchange that it would receive a $500 million advance from Apple this month," Han reports. "'Although LG Display already had a relationship with Apple, the deal's duration and the size of the advance show that the two companies are involved in a long-term, strategic alliance,' said Son Young-jun, a spokesman for LG Display."

"'LG Display's panels already represent more than 70 percent of Apple's notebooks and monitors,' said Park Sang-hyun, an analyst at HI Investment & Securities," Han reports.

Full article here.

MacDailyNews Take: Lucky GoldStar, indeed.

[Thanks to MacDailyNews Reader "James W." for the heads up.]

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Jan 12, 09 - 05:15 pm Comment from: Artist

Goldstar certainly has come a long since those horrible products the used to sell at Woolworths

Jan 12, 09 - 05:17 pm Comment from: Richie

$500 million advance... wish I could find a customer willing to do that!

Jan 12, 09 - 05:19 pm Comment from: one guy from Finland

LG and Phillips

Jan 12, 09 - 05:20 pm Comment from: Spark

It's LG's Lucky Goldstar day!

Jan 12, 09 - 05:26 pm Comment from: Jubei

With all the cash Apple has right now, they can do some serious investments during this downturn. Investments and purchases that will bring the hammer down on the competition when the market starts to recover.

Jan 12, 09 - 05:39 pm Comment from: gow

... and Apple monitors will get worse... great news.

Jan 12, 09 - 05:41 pm Comment from: R2

First Samsung with the printers and now this. We're facing one of the worst economic downturns here at home and Apple can't stop giving money and brand power to foreign companies. Why couldn't they do a deal with Vizio, the only major American TV producer still standing, and help strengthen the American economy rather than that of Korea?

Jan 12, 09 - 05:42 pm Comment from: cw

So---no led imac? shit!

Jan 12, 09 - 05:43 pm Comment from: cw

How about sed or fed diplay?

Jan 12, 09 - 05:43 pm Comment from: zaxxon4

It also might be an order for some new OLED screens.

http://www.oled-info.com/more-info-and-photos-lgs-15-oled-will-begin-production-june-2009

Jan 12, 09 - 05:45 pm Comment from: oopsie child

... and Apple monitors will get worse... great news.

From the article:
'LG Display's panels already represent more than 70 percent of Apple's notebooks and monitors

Unless LG gets the idea to ship Apple crap, I don't see what could "get worse". Sounds like more of a formality to me.

Jan 12, 09 - 05:46 pm Comment from: ken1w

Didn't Apple have a similar arrangement with Samsung a few years ago? I don't think this is anything new or special.

Apple just wants guaranteed access to a supply of LCD panels at a lower cost, for when the worldwide economy improves and supply becomes constrained before the suppliers can ramp up production. Smart move. That "$500 million advance" essentially pays for displays up front at the current depressed price.

Jan 12, 09 - 06:14 pm Comment from: Apple A Day

LG signs 5-year LCD supply deal with Apple...

yuk, guess it's another 5 years of annoying glossy screens.

But Apple seems to be profiting some more by applying a $50 anti-glare filter on Built to Order MacBook Pro's.

Soon for the rest of the lineup?

*prays*

Jan 12, 09 - 06:21 pm Comment from: G4Dualie

500 million is not enough to remove the Goldstar stank rank from LG. Not for me, anyway.

Apple has chosen to favor LG, thereby elevating their stock and cachet. I hope they've earned it, properly. I mean, I hope Apple's QA audited them thoroughly before signing off on any long-term deals.

As rich as Apple is, they cannot afford to let their guard down on maintaining their quality standards. They can't be expected to lift entire communities out of poverty either just by paying a better wage, especially if the government can bleed them in a manner unbeknownst to Apple.

Just because China has stopped poisoning our pets doesn't mean there is a ban on poison.

The way our present government has been "minding the store" though, there's just no telling how corrupt these foreign manufacturers are and I would hope Apple trusts no one and wants continued verification.

Jan 12, 09 - 06:28 pm Comment from: Plouf1er

Didn't we hear recently a rumor concerning "touch screens" that were seen developped by LG ?

Jan 12, 09 - 08:33 pm Comment from: KenC

@R2, Vizio is NOT American. It's Chinese.

@G4m LG is not Chinese, it's Korean.

Jan 12, 09 - 08:35 pm Comment from: R2

Vizio is American, KenC.

Jan 12, 09 - 08:51 pm Comment from: cwa107

@KenC

Read:

http://www.vizio.com/about.aspx?id=1250

Jan 12, 09 - 08:54 pm Comment from: Peter

Vizio is an American company, headquartered in Irvine, CA (just down the road from me, in fact). That said, they provide very little in the value chain--their TVs are assembled in China and they mostly play the middle-man.

Jan 12, 09 - 08:57 pm Comment from: Raymond in DC

R2 asks, "Why couldn't they do a deal with Vizio, the only major American TV producer still standing" Yeah, they're "headquartered" here, but what makes you think Vizio makes anything in the US? AFAIK, they do all their manufacturing in Asia (China, I think).

Jan 12, 09 - 09:25 pm Comment from: bobchr

Vizio is about as American as Zenith was before LG bought the rights to the name. You can still get a Zenith TV if you want to but the profits are being repatriated in Korea. Seems Vizio is basically a contract buyer of manufactured goods and services. The concept is clever really, you select components to provide a feature set for a line of flat panel displays that you offer in odd sizes. You contract buy the supplies in bulk, contract assemble them overseas and dump them in Costcos', BJs',and WlaMarts' all over the country.

You can afford to sell thes flat panels at a lower cost because you offer odd sizes and feature sets that have no direct competition. I think they are the only ones to offer a 32" plasma TV, I doubt' it has more than 1 HDMI port and resolution is probably about 720P because you can get away with it at that size. Because your aim is to displace 35" diagonal CRT's you can take a bigger margin on your odd size equipment and still maker it look like you are offering a bargain compared to what the other major manufactures are selling.

Vizio as someone said earlier is just a middleman. Why would Alpple deal with a Middleman that's what DELL does. Vizio has no real design talent and hence they will always offer second tier products. Specifying circuits from IC block diagrams is not design talent. I'm not kn0cking them mind you but they are essentially doing for flat panels what DELL did for PC's .

Jan 12, 09 - 09:34 pm Comment from: yet another steve

I'm sure the real news here is financial.... LG gets a big hunk of cash up front (a scarce thing in today's world) and guaranteed purchases; Apple gets guaranteed supply and favorable pricing.

Analysts are sooo clueless as to the many ways in which the current financial environment can HELP Apple's margins.

Jan 12, 09 - 09:42 pm Comment from: MacSheikh

I'm sure Apple couldn't care less whether their LCD manufacturer is American, Korean, Chinese or Mexican. It's business, and it all boils down to cost.

I'm sure if Vizio could produce the LCDs at the quality and cost that Apple wants, they would've gotten the contract. In any case, you guys will be the first to complain if Apple buys higher-priced (presumably) "American" LCDs and then have to increase their prices.

Besides, looking at the economic situation, just because you throw $$ at these companies doesn't mean they'll survive and/or prosper.

Jan 12, 09 - 09:43 pm Comment from: qka

$500 million - does Apple buy screens from Rucky Goldstah, or do they buy Palm?

(personal history, it will always be Rucky Goldstah to me. Says so in my Kringlish dictionary. So sorry.)

Jan 12, 09 - 10:47 pm Comment from: schmluss

42" AppleTV anyone?

Jan 12, 09 - 10:51 pm Comment from: anypats

I am on my iPhone so I can't cut and paste the link but Vizio LCD panels are made by LG. Vizio's plasma panels are mainly from Panasonic. Vizio does not manufacture anything - they build cheap TV's from mostly second hand product. I sell TV's and this is a main reason we don't sell Vizio. We don't have anyone locally that can fix them because they use such a wide variety of parts from so many manufacturers.

Another thing with Vizio is the lawsuit against them from Funai for patent infringements. More than likely they are going to end up paying royalty fees to Funai. This will of course raise the price of their televisions.

One last thing is that our local Costco says that Vizio has a 40% return rate. Costco and Sam's Club have already changed their very liberal return policy on technology items to 90 - 180 days. I'm not sure about Sam's Club, but Costco is looking to change their return policy on Vizio specifically to 60 days.

These are some of the main reasons that I don't see Apple ever working with a company like Vizio. But, since LG produces the panels for both companies, it's really a moot point.

Jan 12, 09 - 11:26 pm Comment from: Bandit Bill

Life's Garbage

I guess I won't be buy any more Apple displays.
Now people really will have an argument when they say their Dell display is better than an Apple display.

Jan 13, 09 - 12:51 am Comment from: twilightmoon

@Bandit Bill

So no laptops, iPhones, iPod/touches, iMacs for you.

That leaves XServes, Minis and Mac Pros.

Guess you might as well get a Dell. I'm sure they are environmentally sensitive and only buy from companies with high ethical standards.

Jan 13, 09 - 08:10 am Comment from: John C. Randolph

Hmm... I wonder whatever became of that deal between Apple and Samsung? I thought that was about displays, but it might have been about securing supplies of flash RAM.

-jcr

Jan 13, 09 - 08:37 am Comment from: Peruchito

@John C. Randolph

i think that was RAM.

Jan 13, 09 - 10:16 am Comment from: Rudge

It's good to see LG get more chummy with Apple. Maybe we might see their future LG phones more compatible, to sync with the Mac OS X now. Fingers crossed.

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