“Chip suppliers involved in the supply chain of the Apple Watch are gearing up to start production for the upcoming wearable device, according to industry sources,” Cage Chao and Jessie Shen report for DigiTimes.
“Orders for chips for the Apple Watch, set to debut in early 2015, are estimated at 30-40 million units, the sources indicated,” Chao and Shen report.
Apple Watch will feature a custom-designed chip, the Apple S1. Apple has integrated many subsystems into one remarkably compact module, which is then completely encapsulated in resin to protect the electronics from the elements, impact, and wear. Configuring an entire computer system on a single chip is an industry first and represents a singular feat of engineering and miniaturization.
Read more in the full article here.
[Thanks to MacDailyNews Readers “Dan K.” and “Lynn W.” for the heads up.]
So are we saying Apple would place an order with it’s suppliers saying, please make us 30 to 40 million chips for the Apple Watch? Seems kind of vague to me.
Not sure how reliable this source is, but the contract could say that Apple needs a minimum of 30 million, but Apple can ask for up to 40 million under the same contract.
Well as far as I know its the only product that will be using that chip so a clear indicator. However I think the way it works is that there is a request to prepare capacity for said amount to the given design but orders of that magnitude are spread over a given period during which actual orders can be flexible within that total but no doubt including a firm initial order no doubt. So its a potential order rather than a firm order I think. But it is indicative of the overall plan.
Those numbers are hard to digest. Has the combined sales of all smart wearable devices so far even reached a few million? How on Earth could Apple possibly sell 30 million AppleWatches? I’m simply basing this on all the people who claim they don’t wear watches anymore. What would get them to wear some clunky thing on their wrist that needs to be charged every night? Even as a diehard Apple shareholder, I honestly don’t see it unless health insurance companies offer rebates or require it or something to that effect. I wear watches and am a fitness buff, so sure, I’m buying one, but most of those consumers out there probably won’t have any interest in something like that. 3 million units in a year I can possibly see, but 10X that amount is just crazy.
I’d wear some bulky device on my ankle if it could give me a week’s battery life and they can get all those sensors to give meaningful data to me. But hey, that’s just me. In theory AppleWatch sounds terrific, but I don’t think the tech is there just yet for the average consumer.
Laughing_Boy48……
Join the long queue of people who “honestly did not see it”.
Your club grows larger and the queue ever longer so you will not feel lonely standing in it, shareholder or not.
LB48, sorry that you do not want to buy an Apple watch. But that is not the issue. Having worked in high volume electronics it would go this way.
Apple says it wants chips. It expects to order about 30 million.
It wants so many thousand chips a week, ordering say about 1 million to begin with.
Each month or so, Apple oks another 1/2 million to be built.
If Apple decides that the watch does not sell, it stops ordering chips at some point and the supply dries up.
The actual orders are done in steps so that Apple does not have all the risk, but the pricing is based on 10-30 million total with a fee if not enough are ordered. Both sides get some protection.
‘I’d wear some bulky device on my ankle.’
You may have to one day- if you misbehave.
Just about everyone I know wants an Apple Watch. They will easily sell 30 million.
Well, if they actually come to buy $35 million of these chips, and put one in each watch made, AND, the watches sell at an average of say $500 each, that would bring in approx total gross revenue of about $17.5 billion …. Not 2 bad, heh?
I think Tim Cook came out with the number of 50 million units expected for the first year and as usual gives a grain of salt warning to those who suck up rumors at the supply chain trough.
“Tim Cook has cautioned investors not to pay much attention to these types of supply chain leaks, as they don’t accurately paint the full picture. Furthermore, Apple frequently double orders components when yields are low, only to modify or cancel orders later as yields improve. For these reasons, investors shouldn’t pay too much attention to that 50 million figure.”