Apple and LG Entered into LCD Panel Partnership

On the market for IT components, computer manufacturers usually send requests among different producers, expecting to capture the best deal. However, such procedure have some drawbacks, and the PC manufacturer might after some time pay a premium price if stocks increase or to face delivery/availability issues if request sky rockets.
To protect themselves from such risks, some Pc manufacturers sign up long-term partnership with component producers. Apple did it in the past with Samsung for NAND flash memory, and just did it for LCD panels. LG announced to have signed a 5-years contract with Apple to provide LCD displays for computers, music players and mobile phones. The South-Korean company will receive 500 millions USD in advance, most probably against massive price reductions and insurance of exclusive/priority shipment of the products.
If such contract might surprise readers, it is almost a no-risk strategic decision. Indeed, LCD panels manufacturers have growing stocks and financial problems especially since the last quarter, and Apple was in excellent conditions to set a deal with low prices which will extend once the economic slow down is over.