However, in-cell touch is expected to take off in 2012 as yield rates improve.
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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
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 front panel is directly attached to the new In Cell Touch LCD without containing an air layer in between.
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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 LCD industry has been working on the in-cell touch technology for several years.
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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.
But in-cell touch screens are harder to manufacture than conventional LCD screens.
WSJ: Apple's Next iPhone Has Thinner Screen, Better Display Quality
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.
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
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
Becca Mishkin, a resident of the Upper West Side in Manhattan, doesn't have a regular landline phone, so she relied on her cell phone to keep in touch with family.
Lilliputian's engineering miracle was in designing a tiny solid-oxide fuel cell that instead of melting everything in its vicinity is merely warm to the touch.
In-cell display tech eliminates that middle layer of glass, combining the LCD and touch sections of the display into a single layer.
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