“The March 11th tsunami that has devastated Japan is expected to create shortages of Apple’s most popular products for the remainder of the month and through next quarter, as at least two of the company’s core component suppliers in the region have temporarily shut down operations to assess damages,” Katie Marsal reports for AppleInsider.
“Speaking to contacts in Asia last night, Piper Jaffray analyst Gene Munster learned that the production status from Apple’s Japanese-based component suppliers is changing hour by hour, but said that none of those partners have been able to quantify the extent of their damage with any degree of certainty, nor have they set a timeline for when production will resume,” Marsal reports. “In particular, Munster said that Mitsubishi Gas Chemical Co, which he believes is Apple’s primary supplier of BT resin — used in producing printed circuit boards for chips in iPhone and iPad — is temporarily shut down to assess damage related to the earthquake. Similarly, Toshiba, which produces around 40% of the world’s flash memory and supplies a significant portion of that to Apple for its iOS devices, is temporarily shut down for the same reasons.”
Marsal reports, “As such, the analyst expects component delays for some of Apple’s key products, including iPhone 4 and iPad 2, to persist throughout the June quarter.”
Read more in the full article here.
I had a feeling this would be the case. And this time, I believe Apple’s forecast revenue will be on par with their projections, but I expect profits will be down due to higher component costs.
What “would be the case”? That analysts would predict component shortages? Which of course means little to nothing.
Or are you assuming that Apple is facing actual shortages, which there is no hard evidence of, yet?
No evidence, as of yet, but circumstantially it is LIKELY to happen. Especially if Apple practices JIT logistics like the rest of the industry. Hopefully I’m wrong.
OK. Poor choice of words. I meant to type “could” not “would”.
So much for globalization being the way forward. Not saying that this could not have occurred if all production was in the USA, what i am saying is that considering globalization – shouldnt we have suppliers all over the place ready to step in and fill demand, have a hard time thinking other suppliers cant step up.
As you may know, Apple only sources “top-tier” components and unfortunately they include Li-Ion batteries from Sony and NAND flash memory from Toshiba. Both companies have affected factories in Northern Japan Also, Apple essentially purchases inventory in advance and enjoys quantity pricing.
If Apple has to go to alternative sources, it means they will more than likely have to pay higher prices, due to shortages, and perhaps get in the back-of-the-line in terms of allocation.
It’s a rather fluid situation, so who knows how much Apple will be affected… Then again, since the Apple iPad 2 has been so successful, and there has been talk of a “tablet bubble” (i.e. other tablets scheduled for release, will not, because their makers need to go back to the drawing board to make them more competitive) may quietly give Apple COO Tim Cook a call and ask, “Hey, I hear you need some NAND flash memory? If so, have I got a deal for you…” 😉
Very possible, in fact anything is possible.
What is worrying is that Apple should be able to produce 40k – 100k units a day to hit the 2-3 million a month production goal, at 40k a day, we should not be seeing this kind of back log considering NYC stores are getting spotty shipments of 100+ units every couple days only. Considering apple has less than 300 stores in the usa, and really only apple stores are getting deliveries – each store should be getting over 100 units a day since the launch. And if you doubt the 2-3 million mark per month, then that means you dont think apple will sell the 18-27 million units of ipad 2 this year, which at that number is below market analyst for total number of units to sell of ipad 2 alone this year.
The math some where does not add up. Either they are not producing at the mark needed to meet predicted demand or the pads are going some where else – international launch?
Then i have to ask why launch in X other countries when you cant fill demand in ONE.
I think Apple should have done all black first and introduced the white later as with iphone, to cut down on variances.
Piper Jaffrey’s Munster did say he believes Apple would have multiple redundancy component suppliers, so materially they may not be affected. However, it may affect any plans Apple may have had to accelerate production.
Its made there rather than here because it’s cheaper. Globalization is just a word. Money. Money talks. It’s cheaper for Apple to use third world labor because they can pay third world wages. Think of that the next time Steve is bragging about the new “revolutionary device” from Apple.
You shouldn’t just highlight Apple. HP, Dell, IBM, Microsoft and so many other American companies manufacture products in China, Malaysia and other countries.
My 64GB WiFi iPad v1 is doing just fine and has replaced my laptop as a mobile computer. Cannot see any reason to buy an iPad 2 personally as I have no need for the cameras.
Foxconn (which I think is who assembles the Ipad’s) says they have at least 2 to 3 weeks worth of supplies still.
http://www.digitimes.com/news/a20110318PD208.html
If apple can’t meet the demand due to the earthquake etc, how much you want to bet that the “analysts” will completely ignore the situation and mark it up as the iPad 2 just isn’t that great.
And/or blame apple.
My mom got her white iPad 2 yesterday, mine finally shipped today… Not entirely impressed with the cameras apple put in the iPad 2 right now, but damn the thing is fast and just like steve jobs said it feels so much lighter than my “old” iPad 1. Can’t wait to play infinity blade on my 55″ big screen
Here is another link
http://www.appleinsider.com/articles/11/03/18/apple_has_have_enough_ipad_2_components_to_maintain_production_for_2_3_weeks.html