The report says Apple would be sourcing its in-cell displays from Toshiba and Sharp.
Using in-cell technology, its LCD 4.7-inch IPS HD touchscreen is an impressive 8.4mm slim.
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However, in-cell touch is expected to take off in 2012 as yield rates improve.
ENGADGET: Report: Touchscreen demand to grow by 90-percent, led by mobile, tablet markets
Shipments for in-cell touch, which first came to market in 2009, didn't materialize in 2010.
ENGADGET: Report: Touchscreen demand to grow by 90-percent, led by mobile, tablet markets
The LCD industry has been working on the in-cell touch technology for several years.
WSJ: Apple's Next iPhone Has Thinner Screen, Better Display Quality
"The provision of in-cell TVs... is a privilege which has to be earned, " a spokesman said.
By switching to a new display with in-cell touch sensing, Apple was expected to reduce its manufacturing expenses.
"We do believe that the next iPhone display will implement in-cell touch, " DisplaySearch's Paul Semenza told Wired via e-mail.
The iPhone 5's display uses a new technology, In-Cell Touch, that requires fewer layers than previous generations of touch displays.
In-cell display tech eliminates that middle layer of glass, combining the LCD and touch sections of the display into a single layer.
Super AMOLED and Super LCD screens use on-cell technology rather than in-cell.
But in-cell touch screens are harder to manufacture than conventional LCD screens.
WSJ: Apple's Next iPhone Has Thinner Screen, Better Display Quality
At the same time, the adoption of in-cell technology is bad news for makers of conventional touch panels used in many smartphone screens now.
WSJ: Apple's Next iPhone Has Thinner Screen, Better Display Quality
So is in-cell really something Apple would pull the trigger on?
Instead of using a display comprising a number of separate layers, Apple could use in-cell touch display technology, according to a Friday report from Digitimes.
Right now, in-cell touch displays are still an emerging technology.
There's also been talk of Apple using a thinner, better panel that would likely use in-cell touch rather than stack the LCD and touch surfaces in separate layers.
"The advantage of in-cell is that you're streamlining the manufacturing process, so in time you should be able to drive efficiencies and reduce cost, " IHS analyst Rhoda Alexander told Wired.
In-cell technology isn't currently deployed in any shipping cellphones.
In-cell touch can help reduce the thickness of the display, which could make the iPhone 5 thinner than previous models, or clear out space to add other features like a larger battery that can help extend operating time.
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As envisioned, the screen looks like an ideal fit for a significant revamp of Apple's mobile display technology, although we'd be careful about assuming that this or any in-cell touch implementation is a lock for potentially imminent iOS hardware.
ENGADGET: Apple gets patent for in-cell touch display with impeccable timing
Look what we have here, possibly in the nick of time: it's a newly granted Apple patent for a screen with in-cell touch, where the LCD and touch recognition are integrated into one panel instead of stacking up in separate layers.
ENGADGET: Apple gets patent for in-cell touch display with impeccable timing
The report added the only modification since 1842 has been "the re-installation of in-cell sanitation, the effect of which has been to require two strangers to eat, sleep and spend a large part of their waking hours in what amounts to a shared lavatory".
Measuring at 6.93mm thick (instead of the rumored 6.13mm), we're surprised that Oppo didn't set this to be the follow-up to the Finder: sure, it's 0.28mm thicker, but it also aces the latter with a 4.7-inch 720p in-cell display, a 1.2GHz quad-core chip with 1GB RAM (likely MediaTek's Cortex-A7-based MT6589 SoC), Android 4.2 and a sorely missed 3.5mm headphone jack -- so no micro-USB adapter required.
ENGADGET: Oppo's 4.7-inch, 6.93mm-thick R809T pays homage to the Finder
Mercedes-Benz has the A-Class E Cell, sold only in Europe, and the B-Class F-CELL, but plans to debut the SLS-AMG E Cell in a battery electric version by 2013.
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In 2003, IBM's Adam Bennett showed Microsoft specs for the still-in-development Cell core.
They were able to get a clone in a stem-cell line in basically one of 17 eggs used.
And Nikon Instruments is providing his team with a fascinating all-in-one cell incubator and scanning device to make it happen.
Morgan Stanley has raised money for Tesla Motors, a producer of electric cars, and it has invested in Bloom Energy, an innovator in fuel-cell technology.
We don't know how much further behind launch Qantas is, but obviously they've stated their intentions to enter the in-flight cell arena, so it's only a matter of time.
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