Flat-panel prices are rising faster than expected, claims DigiTimes.

The report lends weight to claims that Apple's iMac production has been upset by shortages of 15-inch screens.

If true, this has driven iMac demand to exceed supply, and caused Apple to ship the three different models later than originally announced.

Flat-panel prices began climbing in the latter quarter of 2001. LCD monitor prices climbed from $299-349 in the third and fourth quarters of 2001 to $429 in March.

Partially, the rises reflect the steady growth in the market for portable computers, such as PowerBooks and iBooks. This is combined with increased demand for flat-panel monitors in the consumer market.

Market demand Panel makers, meanwhile, have suffered losses in the past - so they hope to leverage market demand by raising prices to make a return on their investment.

The report explains that manufacturers had reduced their flat-panel output in response to previously slow demand. This led to supply shortages, further driving price increases, particularly for the 14.1-inch notebook screens and 15-inch panels.

It's understood that, facing increased demand, panel manufacturers ramped-up production towards the end of last year.

Apple employs 14.1-inch screens in its iBooks, and 15-inch screens in the new iMac.

Prices rise 15-inch panel prices (now $250-260) were not expected to reach $250 (for OEMs) until the fourth quarter 2002, claims DigiTimes.

"Many panel makers have said that 15-inch panel prices will increase by another $5-10 in April. Of added concern, Hitachi and Samsung have both said that prices of 14.1-inch notebook panels would rocket to $245," the report claims.

15-inch LCD monitors cost $180-$190 in the third quarter 2001, while 15-inch notebook panel prices have climbed to $260-270 from $190-200 in the period.

High panel prices are driving up end-product prices, DigiTimes warns. Apple's focus on flat-panels could impact on the company's bottom-line in this period, but the company isn't unique in this; PC manufacturers are currently introducing sub-$1,000 PC notebooks.

Apple impact During its last financial analysts’ call, Apple CFO Fred Anderson warned that component price increases this year could impact on the company.

However, Apple's management predicted supply challenges in the current quarter. Anderson said: "It will take most of the quarter to ramp-up the manufacturing of the new iMacs, so we're not likely to meet expected demand during the quarter."

However, in the absence of any profits warning from Apple, analysts remain optimistic the company will meet its $1.5 billion revenue target for this quarter. Apple's stock stood at $24.95 at close of trading on Nasdaq, Friday, a 2.13 per cent rise in value on the day. Shares held their value on the extended trading market.

Apple's second quarter closes at the end of March. The company is likely to report its performance in the period in April.