LG affiliates to benefit from iPad mini

HONG KONG (Yonhap) -- LG Display Co. and LG Innotek Co., affiliated with South Korean conglomerate LG Group, will benefit from the launch of the iPad mini, solidifying their status as suppliers for Apple Inc., J.P. Morgan said Tuesday.

Apple is scheduled to introduce a new product on Tuesday U.S. time. Market experts expect the new product will be a smaller version of the company's popular tablet PC iPad. The new product is seen to rival Samsung Electronics' tablet PC Galaxy Tab, which is offered in different sizes.

J.P. Morgan said LG Display will be one of the biggest beneficiaries of the new iPad, estimating the Korean display maker will produce 70 percent of the panels for the iPad mini.

"The iPad mini is likely to provide additional revenue opportunity to LG Display, in our view," said JJ Park, an analyst at J.P. Morgan. "We expect its dominant position to continue in the iPad mini supply."

Apple's tablet PC-related sales will contribute to 50 percent of LG Display's operating profit, equivalent to 220 billion won ($199 million), the U.S. investment firm said. The figure is forecast to rise to 270 billion won.

The financial firm also expected that LG Innotek will be a major supplier of camera modules for the iPad mini, following its previous iPhone 5 supply.

LG Innotek's iPad mini-related sales will reach up to US$150 million, making up some 3 percent of the company's total sales, J.P. Morgan projected.

Meanwhile, Samsung Electronics, the world's largest computer memory chip maker and a leading smartphone maker, has seen its exposure to Apple gradually being reduced.

"We estimated Samsung's exposure to Apple now hovers around high-single digit percent of total revenue," Park said.

Samsung Electronics was expected to continue to be the sole vendor for iPad mini's Application Processor chips.

However, iPad mini-related earnings will not be significant for Samsung Electronics' overall earnings due to smaller volume and tight margin, J.P. Morgan said.

Samsung Electronics and Apple have been locked in a series of legal suits since April 2011, accusing each other of design and technology patent infringement.

Despite being embroiled in the heated rivalry, the two top smartphone giants had been key partners in the mobile device industry, with Samsung Electronics being the supplier of display panels and chips for the U.S. firm.