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There are widespread reports of a heat problem with the new iPad. The problem is so ubiquitous that it even prompted Consumer Reports to run a test.
The Consumer Reports found in their tests that the new iPad gets up to 13° F hotter than the iPad 2. Consumer Reports engineers found that temperatures ran as high as 116° F when playing Infinity Blade II.
Heat appears to be a problem only under extreme usage conditions. For most users, heat should not be a problem. However, this incident points to a chink in Apple’s (AAPL) armor.
Consumer Reports did not point out the cause of the heat. It appears to me that the heat problem can be attributed to the new high resolution display and the A5X chip.
The primary problem appears to be heat generated by the LEDs used to light the display. The new iPad has twice the number of LEDs compared to the iPad 2. Further, the brightness efficiency in the new iPad is less compared to the iPad 2 because the new iPad has more pixels. Therefore, the power requirement of the new display is likely to be quite a bit more than twice the power requirement of the iPad 2 display.
The bigger battery in the new iPad is capable of generating more power for twice the number of LEDs, but it generates heat.
Samsung (SSNGY) is rapidly generating a huge advantage over Apple because of its AMOLED technology.
AMOLED is a cousin of the traditional OLED. AMOLED stands for active matrix organic light emitting diode. Active matrix is a way of addressing the pixels. An AMOLED display consists of an active matrix of OLED pixels. Crucial to manufacturing AMOLED displays is thin film transistor technology, which uses traditional silicon.
To understand the attractiveness of OLED technology, you have to see a state of the art OLED display. The picture is brighter like you have never seen. Black becomes pitch black. Colors become extremely vivid. Motion is incredibly sharp. Response times are lightning quick.
Displays are paper thin and weigh almost nothing.
The big advantage of OLED technology is low power consumption when the screen is not mostly white.
AMOLED displays are common place in Samsung phones running Android from Google (GOOG). Even the downtrodden Nokia (NOK) is using AMOLED in its new Lumia 900 Windows phone.
Steve Jobs is known to have disliked OLED technology. At one time there were good reasons to not believe in this technology, but Samsung has taken quantum leaps in making the technology practical. For background please see Steve Jobs’ Failure To See Light In OLED Could Cost Apple.
In 2010 at the Apple World Wide Developers Conference, Jobs touted Retina Display, which relies on traditional silicon LED technology. Jobs said, “You can’t make an OLED display with this resolution, we think it is quite superior.”
Perhaps the early problems of limited life, color balance, and screen burn led Steve Jobs to favor improving traditional LED technology and not investing vigorously in OLED technology.
Apple is very secretive and there is no public information to show definitively which way Apple is moving now. However, there have been persistent unconfirmed reports that until recently Apple has continued to favor IGZO (indium gallium zinc oxide).
Although there are reports that most of the panels for the new iPad are being supplied by Samsung, there are persistent reports that Apple continues to favor Sharp. (For background please see 'Apple May Pay Billions To Samsung For New iPad.')
It appears that neither Apple nor Sharp has signed licensing agreements with Universal Display (PANL), a provider of OLED technologies that seems to have a stranglehold on certain intellectual property related to OLEDs.
This is an example of a chink in Apple’s armor. While Apple euphoria is in full swing, astute investors may want to stay cognizant of risks.
About Me: I am an engineer and nuclear physicist by background. I have founded two Inc. 500 companies, and have been involved in over 50 entrepreneurial ventures. I am the chief investment officer at The Arora Report, which publishes four newsletters to help investors profit from change. Please feel free to write me at Nigam@TheAroraReport.com. You can follow me here and get email notification when I publish a new article.
Full disclosure: Subscribers to The Arora Report are long Apple from $131 and have taken partial profits at $360, and $525.
