Last week, we reported that Apple could use in-cell touch panels in the next generation iPhonethat could allow it to make it thinner than iPhone 4S.

So the question was how much thinner? Analyst Ming-Chi Kuo at KGI Securities has answered that question in his recent report. He believes that Apple could reduce the thickness of the next generation iPhone to under 8mm compared to iPhone 4S, which is 9.3mm thick.

Here’s an excerpt from his report via MacRumors:

Since Apple’s smartphone competitors have generally slimmed down their high-end offerings to 7-8mm, Apple needs to make a leap forward from 4S’ 9.3mm thickness. We believe Apple will aim at 8mm or below (at least 1.4mm slimmer) for iPhone 5, in a bid to ensure brisk sales through 2014, while peers will also continue to introduce increasingly slim models next year.

As such, all iPhone 4S components that account for thickness must be slimmer, specifically, touch panel, battery and casing. Moreover, a marginal amount of space is required between the three parts for the sakes of assembly tolerance and thermal expansion of components.

Kuo believes that Apple could achieve this by using in-cell touch panels, which could reduce the thickness by 0.5mm, use a 10% thinner but slightly broader battery and using a metal back case that could reduce the thickness by another 0.5mm compared to the glass back used in iPhone 4S and iPhone 4.

Kuo also points out that by using in-cell touch panels Apple could significantly reduce production time from 12-16 days to just 3-5 days.

While the initial yield on in-cell touch displays is currently lower than for glass-on-glass manufacturing techniques such as those used for the iPhone 4S, that deficiency can be compensated for by re-bonding in-cell panels and cover glass units with the optically clear resin (OCR) used in the bonding process. The optically clear adhesive (OCA) used in the current manufacturing process can not be re-bonded if the initial bonding fails.      

We all know how passionate Apple is about making their next generation devices thinner, so this cannot be completely ruled out.

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