“Last week, shares of Apple did something they rarely do: they fell nearly 7 percent, in two days,” Miguel Helft reports for The New York Times. “The unusually sharp drop, which was twice as large as the decline in technology shares over all, was driven in part by worries over the impact that the crisis in Japan would have on Apple’s ability to make its blockbuster products. It didn’t help that the iPad 2, the latest Apple gadget that everyone seems to want to get their hands on, appears to be in increasingly short supply, a situation Apple has found itself in before.”
MacDailyNews Take: For such a smart company, it’s surprising that Apple doesn’t anticipate demand better. It’s a recurring issue; so much so that it’s mystifying why the hell it keeps happening. When prepping iPad 2, Apple didn’t know that iPad was a success? They didn’t know the date they planned to launch iPad 2 and ramp up accordingly? They couldn’t extrapolate from iPad unit sales what was highly likely to happen with iPad 2 demand? And, don’t blame the Japan disasters, they quickly ran out of iPad 2 units on day one and this issue has plagued Apple for years.
For crying out loud, they couldn’t get iPhone 4 supply/demand in balance for nearly a year! Yeah, yeah, yeah, “it’s a nice problem to have,” but how about fixing it at some point? Seriously, what’s the issue, Apple? (Hints: Increase launch supplies and manufacturing capacity. Plan to make at least twice as many iPad 3 units for launch as you currently project. Newsflash: Whatever you think you’ll need at launch is not enough; it hasn’t been for nearly a decade.) “Running a tight ship” does not mean habitually underestimating demand and repeatedly inconveniencing your customers.
Helft continues, “Apple, like other technology companies, is at risk of being buffeted by the unfolding crisis in Japan. Every major computer and consumer electronics maker relies on components that directly or indirectly come from Japan. Apple’s success, though, combined with its recurring difficulties in meeting the demand for some its hottest products, including the iPad and iPhone, have prompted investors to single out the company.”
“On Monday, for example, analysts highlighted a new concern: 300-millimeter wafers, which are silicon disks used to manufacture essential chips for the iPhone and iPad. A factory operated by Shin-Etsu in Shirakawa, in northern Japan, produces at least 15 percent of the world’s supply of the wafers, said Gus Richard, an analyst with Piper Jaffray, and is not likely to become operational for a long time,” Helft reports. “‘Will it affect Apple today or tomorrow?’ Mr. Richard said. ‘No. But everyone is worried about those wafers. At some point, chip makers will run out.'”
Read more in the full article here.