Sharp, a major manufacturer of displays, has reportedly nearly halted production of displays for 9.7” Apple iPad media tablets due to shift of demand towards smaller version of the slate. Actual production levels are unknown, but the news-story is clearly a wake-up call for the industry.

Sharp has stopped shipping iPad display panels made by its screen production line at Kameyama plant in central Japan. The output of the factory has fallen to the minimal level to keep the line running this month after a gradual slowdown began at the end of 2012 reports Reuters news-agency citing its confidential sources.

Sharp has stopped delivery of panels for Apple’s third and fourth generations of iPad that have retina-class screens with 2048*1536 resolution. The actual level of remaining display output at Sharp was not immediately clear, but it was extremely limited, according to the news-agency.

It should be noted that numerous other companies, including LG Electronics and Samsung Display also make displays for Apple's iPad. No reports about their production have been released.

For Apple, a shift for 7.9” iPad mini may be an alarming sound. While many people buy 7” media tablets because of convenience and easiness to carry, loads of customers get those devices because of the price. Apple iPad mini costs $329, considerably less than the iPad 2 at $399 or iPad 3/4 at $499.

With the 9.7” iPad, Apple enjoys margins that are higher than the industry’s, but lower than the company’s average according to financial analysts. It is unclear how flexible the company is about the price of its premium iPad tablets.

Apple and Sharp did not comment on the news-story.

Tags: Apple, Sharp, iPad, iOS, Samsung, LG