“A key component of the Apple Watch made by one of two suppliers was found to be defective, prompting Apple Inc. to limit the availability of the highly anticipated new product, according to people familiar with the matter,” Daisuke Wakabayashi and Lorraine Luk report for The Wall Street Journal.
“The part involved is the so-called taptic engine, designed by Apple to produce the sensation of being tapped on the wrist. After mass production began in February, reliability testing revealed that some taptic engines supplied by AAC Technologies Holdings Inc., of Shenzhen, China, started to break down over time, the people familiar with the matter said,” Wakabayashi and Luk report. “One of those people said Apple scrapped some completed watches as a result.”
“Apple doesn’t plan a recall, because there’s no indication that Apple shipped any watches with the defective part to customers,” Wakabayashi and Luk report. “Taptic engines produced by a second supplier, Japan’s Nidec Corp., didn’t experience the same problem, the people said. Apple has moved nearly all of its production of the component to Nidec, these people said, but it may take time for Nidec to increase its production.”
Read more in the full article here.
MacDailyNews Take: This may explain why some early reviewers have been describing the Taptic Engine as “very subtle.” We experienced no such thing with our Watches and couldn’t understand those characterizations. These early reviewers may have received Watches with defective Taptic Engines.
Regardless, this certainly goes a long way towards explaining why the initial Watch supply is so massively out of whack with the demand that we, and certainly Apple, and anybody else with a brain have expected since the device was unveiled last September.
Related article:
Apple Watch set to lift fortunes of Hong Kong component supplier AAC – December 22, 2014
Yes. I’m happier to wait now for issue to be fixed.
There is no “issue to be fixed,” assuming this rumor is true. Apple did not ship any watches with the defective part. And customers are getting their Apple Watch delivered weeks before the original estimate. And Apple Implemented some “initiatives,” such as the special developer program (to get them watches for app testing) and the eight exclusive retail locations (with supply on April 24), which required significant (additional) supply that would not exist if there was an ongoing manufacturing delay.
So, IF there was a problem with the Chinese part, it looks like that problem is now history and the Japanese supplier is already (happily) “taking up the slack.” 🙂
Well, to be fair, if Apple had enough stock to ship early online orders to meet the April 24th launch date, as usual for previous new product releases, it certainly would have. It’s clear now that it didn’t, and that it pushed ahead with the formal launch anyway.
My order posted at 00:07 AM on April 10th, only two minutes after the web page came on line here in Sacramento, but my delivery date immediately slipped to May 13-27. So, while it’s great Apple caught the defective watches, it clearly decimated its inventory available for the launch.
My point is simply that I now understand what happened, and am happy to wait for a watch without this contractor company’s problematic haptic engine, which might jump up and bite some of those now playing with their new watches over the coming year.
I don’t think Apple ever intended to have a large existing inventory of completed Apple Watch units on April 10. The plan was to have a large stockpile of watch parts and bands. Then, AFTER the “pre-orders” (we should just call them “orders”) started, Apple ramped up production to complete assembly and packaging of watches to precisely fulfill actual orders, not blindly fill inventory weeks (or months) in advance. Basically, Apple starting taking orders (with very limited supply) with a two-week “head start” (to make a lot more) before the first deliveries. (If Apple intended to have a large existing stockpile of completed units for the early pre-orders, the “pre-order” period could have been just one week, not two.}
So, if this rumor is true, this is what happened… Through field testing, Apple found a recurring problem with the Taptic Engine parts from China at some point before April 10. Apple asked the Japanese supplier to provide more, without being certain if that supplier could delivery on short notice. Therefore, the delivery estimates on those early orders where VERY conservative, because Apple was significantly short on the Taptic Engine part on April 10. However, the Japanese supplier was able to supply the additional parts needed, and Apple is quickly “getting back on track.”
That’s my theory, and I’m sticking with it… 😉
I hope you’re right. It would be cool to get my watch on May 13 vice May 27th.
I also wondered whether Apple just ordered up a best guess configuration mix for initial orders, then planned all along to make custom orders for the bulk of the preorders, to minimize stock overages in less popular configurations. Then the parts defect hit, and Apple went into Plan B mode, halting planned store inventory to push out as many preorders as they could for the components they could get to meet those preorders more quickly. Apple Operations is world class, but this crisis is really testing their mettle.
Shenzhen, China supplier sucks.
Japanese supplier gets it right.
Not surprised.
*sigh*
Please grow up China.
Derek, you have no idea what you’re talking about. Chinese suppliers are fully capable of meeting Apple’s requirements, and this kind of thing can happen to anybody.
-jcr
They are obviously “fully capable,” but sometimes not as diligent.
Obviously, some Chinese suppliers are doing great for Apple. But what is China’s default reputation? The world knows. Ripoff and ripoff are the defaults. Shenzhen is the center of technology ripoff within China. It’s sad that Apple got stung there.
I fully hope and expect that China will grow up out of the criminal nation status over time. The incentive of course is now there, the one best result of investment in China from the USA et al. For all we know, Shenzhen could become seriously inventive and innovative over time, as long is the commie government stays out of the way.
He knows exactly what he is talking about. China’s track record over the last 10 years:
– Lead in make-up
– Poison in pet food
– Untold hundreds of counterfeit products passed off as legit
– Lead in products that should not have lead in them at all
– Total disregard for copyright and patent laws
– Worker safety a joke
Hopefully this problem leads to many US tech companies skipping over Shenzhen and make them hurt where it counts. Money.
I’d be willing to bet that there was some component in the AAC Technology devices that was not built per spec. And that kind of thing only happens to people who choose to let it happen. It’s not an “oopsie”, it’s a “damn, caught again”. Unapproved parts substitutions are a common problem. What were they going to do, tell Apple they couldn’t make schedule? Chinese industry needs to learn from W.Edwards Deming. That’s how Japan fixed their quality problems in the “60s. They considered a reputation for poor quality disgraceful to their nation, and made it right.
10-Reasons Why The Apple Watch is a Pointless Device:
* My iPhone and any fitness band can do everything this $350 to $17,000 device can do, except for look cheap on the low end and be gold on the ridiculously overpriced end.
* It drains your iPhone.
* The battery can’t last a single day, hooray, yet another device to charge.
* The components are so cheap they can’t even get the first gen out the door before failing!
* The tiny screen makes us long for the 3.5 and 4-inch iPhones of yore.
* The apps are untested, lackluster, and buggy.
* You really need to pay your bills first, before helping Apple grow it’s pile of money at the end of Tim Cook’s “rainbow”.
* This is the first product since Jobs passed, and it SUCKS!
* The second gen will suck also, because this device is pointless.
* It breaks my heart to see 17-grand flushed down the toilet.
What a shame you live in the shallow end and just HAD to pull troll manoeuvres. I’d have been glad to read thoughtful analysis of how the Watch could improve. But you flushed yourself down the toilet of stupid, silly anonymous coward.. Bye-bye! 😛
ScamScum: You HAVE to try harder. Maybe if you paid your trolls more money you could get a better breed. Think on it.
at least he can count to ten!
Orandy: I understand they are recommending therapy for your problem. http://www.cnbc.com/id/102629063 Hope this helps. 🖖😀⌚️
Hah hah! What ridiculous drivel!
What your point being!!! People who spend £17k on a watch this is pocket change to them. So you saying as example its useless buying a bentley when a ford does thr same thing?
Everything you’ve listed is wrong.
• Fitness bands cannot get email and text notifications. They can’t handle Apple Pay transactions. They can’t show you weather, etc., etc.
• It hasn’t drained my iPhone, and I’ve been using one daily since April 24th.
• Even with me playing with it a lot, my Apple Watch lasted over 33 hours before it warned me that it was at 10% battery.
• The components are NOT cheap.
• The “tiny” screen works perfectly for what Apple Watch is designed to do.
• I haven’t found a single app that is “lackluster” or “buggy”.
• I do pay my bills, and I don’t give a damn how much money Apple has. This is America. Dammit.
• It doesn’t suck.
• You don’t know a damn thing about the second generation model because it hasn’t even been announced.
• You’re just jealous that some people can afford to buy a gold Apple Watch and you can’t. Go back to your mommy, you little cry baby.
Also, the battery last a lot longer than 24 hours. Plus it only takes 1-2 hours to charge it.💥👀👍 I started with 100% yesterday at 11am and woke up this morning with 50% remaining. Took it off, hooked up the charger and an hour later it’s back to 100%. I don’t see anyone pointing this out in reviews.⌚️😱👍😀
And you won’t see anyone talking about this since admitting that the Apple Watch’s battery is really great would destroy the scandal material.
Let me start off by saying, me and my wife just spent more than 17-grand on our recent vacation (Australian cruise).
Together we have: a Macbook Pro, a Mac Mini, an iPad Air 2, two iPad Minis, two iPhone sixes (a 4.7 and a Plus), and my wife uses an iPhone 4S for work as well.
Having said all that, the Apple watch is a disgraceful mess, nobody needs one, much like nobody needs a lead ball in their brainpan!
Only the most overzealous Apple Fanboys and Tim Cook salad tossers need to preorder.
You’re jerk. Period.
A story of nothing happens at the intro of all new Apple hardware. There are delays but…
I get so tired of “sources say” and “…according to people familiar with the matter…”
This really stinks of FUD to push the stock down again. From its interday high of 134.5 now its back down to 128.5. Someone made a boatload with that maneuver.
I would also challenge any company to build devices in the complexity and quality that Apple does in the millions volume that they have to do. Remember this is a first generation model that will obviously run into ramp up issues. Whilst other companies have to make 10s of thousands to meet the initial demand Apple got to make millions.
The EU investigation of Ireland’s tax practices may also have something to do with the drop in AAPL.
Everyone, yes everyone, has said that Ireland’s tax practices are 100% legal and compliant with historical interpretations of EU rules. The issue is that a small, vocal, and powerful subset of regulators in the EU are wanting to take a new, more restrictive interpretation of those rules and are making life difficult for those that follow Ireland’s rules (and Dutch rules and Bermuda rules — remember the tax process being used involves multiple countries). Those regulators are hoping that the EU will get a bigger tax payout if they can get Ireland and others to change their tax laws.
The worry is that Ireland may change its tax laws to placate the most vocal and critical regulators in the EU. If that happens then those same regulators will go after the Dutch next. If that happens and the Dutch change their tax laws THEN it will have a significant tax impact on Apple.
But guess what? It will have just as big an impact on Google, Microsoft, Amazon, and many, many others too!
AAPL may be taking a hit because of what the EU is doing with regard to Ireland, but that is just because Apple is the highest profile company involved with the largest non U.S. cash holding. If the market were fair (and it’s not even close to being fair — and never will be) then all the major companies that use this perfectly legal process would have their stock prices hit too.
It’s just that the Apple Bears are using all means to drive the price of AAPL down. Apple Watch short supply. iPad not selling as well as the Street expects. Ireland (and subsequently Holland and others) may change their tax laws. Apple’s debt is growing, and Apple may not be able pay that debt off from only U.S. profits. The Apple-IBM deal has not proven to be as growth producing as people claimed. The list goes on and on and on.
This has been ongoing for a while. Same applies to GOOG and likely MSFT.
orandy, I look at my iPhone minimum of 20 times a day, and I probably am below average. If the Apple Watch is only a $350 reader and notifier, it is worth every penny. Yet it is a whole lot more. A couple of years ago, did you really think you needed a touch screen? Probably not. Your post was very shallow and negative. If you want negative, look at Samsungs numbers lately.
Quality first.
Unlike Nikon during the D2h days when they continued to sell a defective product that never should have made it past the quality control department.
To be fare, Nikon is better now. even kicking but, while owning up to and fixing their D600 and D750 defects.
Slightly off topic (or off company) sorry.
It’s a good thing Apple found the problem before shipping any defective products. Unfortunately, some news outlets are inferring the watches that were delivered are defective. I think it’s time for the new Apple PR person to earn their keep. Will Apple invite the media into their testing labs again?
Interestng that the realities of setting up a new production line for a previously secret new product are being explored.
Unfortunately such realities had escaped the FoxBusiness reporter who the other day posted a rant about Apple”s inability to provide him with a new Watch on Day One
Come now….you KNEW something like this had to pop up….”antenna gate,” “bendgate,” etc. Every iPhone release has been accompanied by some “issue” that turned out to be either totally false or ridiculously amplified FUD. There’s no way the haters would let the Watch release without doing something to try and muddy the waters.
The statement about watches not making it to market with defective haptic engines is a bit dubious. If the problems were found over a period of time, it seems likely that they were found by end users as well as company testing. Hence some made it to market. Stuff happens. Glad any problems were caught early. And, of course, Apple will take good care of the buyers.
It says they found the problem in FEBRUARY so NO WATCHes with defective Haptic Engines were ever shipped. 👀⌚️😱
You locate incorrectly built products by production records, not field failures. I’m sure Apple figured out the exact days that the engines containing the substandard components were produced and isolated the serial numbers and removed them from inventory before customer shipments began. Don’t forget, Apple had hundreds, if not thousands, of pre-production Watches in daily use for months, on the wrists of engineers and executives. Part of that effort was to identify problems before customer shipments began. If this problem was a basic design of the particular component, then the failures would have been distributed across both vendors. Apparently no so. Does make a June delivery date a little happier, though.
Comments on some news sites about this are remarkably Apple-phobic. I guess that’s to be expected.