IPhone iOS 4 Can't Stave Off Possible Touch Screen Shortage

Even if you don't own an iPhone or an iPod Touch, you may have heard the news that Apple made its shiny new operating system available via free download today.

Departing from Apple's previous nomenclature, "iPhone OS," the new "iOS 4" has mostly been warmly received by the nation's tech writers, as well as positively gobbled up by average users who have long pinned for the multitasking and camera-zoom features that come standard on some of Apple's stiffest competition (Google Android lovers, here's your cue).

But could the release of iOS 4 actually be a stalling tactic by Apple to stave off the red-hot demand for its hot new iPhone 4? With orders coming in at a reported 600,000 in a single day, Apple finds itself hard pressed to keep up with consumer appetites, as was witnessed when the company put a hold on iPhone 4 preorders.

And the latest news suggests Apple might be running out of the integral feature that has made its products over the last four years such monster successes: the touch screen.

According to CNET, Ashok Kumar, a senior tech analyst at Rodman & Renshaw, wrote in a research note that:

Low yields on the IPS LCD panel from LG Display have dramatically impacted the production volumes for iPhone 4. Our supply chain checks indicate that our earlier monthly shipment estimate of 4 million units have been reset by about half.

The hope is that the LG transition to Gen 5 LCD capacity by late summer could help alleviate the production bottleneck. Meanwhile there is a non trivial risk in the September quarter whereby demand for the legacy 3GS iPhone drops off faster than production can ramp up for the iPhone 4.

The IPS LCD panel, or "Retina display," is a much-touted high-resolution screen that is being used in the iPhone 4 and the iPad. It is not found on the current iPhones in circulation, the 3G and the 3GS.

Yet, as Kumar observes, many customers with even the latest build of the iPhone, the 3GS, are likely to ditch their device in favor of Apple's new wares at a disproportionate pace, setting the company up for a severe shortage. Then again, Apple has been accused of artificially enhancing the scarcity of its products to keep demand, interest and blogosphere buzz high, so perhaps the great touch screen shortage of '10 is just all part of Apple's master plan.