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Apple's supply demands could affect Amazon tablet production
According to Digitimes, Amazon is shopping around for manufacturers to supply touchscreen panels for its rumored upcoming tablet. The retail giant has supposedly approached TPK Holdings, Wintek, HannStarr Display and J Touch. Two of the four manufacturers, TPK Holdings and Wintek, currently supply touchscreens for Apple and are hesitant to make a commitment to Amazon. Amazon is looking to ship 4 million tablet units by the end of the year and neither manufacturer has the resources to supply Apple and Amazon at the same time. The online retailer may be forced to turn to smaller manufacturers for its touchscreen panel supply. This move could limit the supply of tablets Amazon has on hand for its launch, which is not a good starting position for a new entrant in the highly competitive tablet market. [Via BGR]
MacBook in short supply, stirs rumors of imminent refresh, rebirth of white plastic?
We've already seen the MacBook Pro sporting new specs, and heard rumblings of a MacBook Air refresh coming soon, and now reports of dwindling supplies of Apple's great white hope have the internets abuzz over a possible MacBook upgrade. AppleInsider did a little digging earlier today, and found that major online retailers, including Amazon, and at least one brick and mortar store were either running low or completely out of the last of the MacBooks. A similar fate has befallen stock of the Mac mini, inviting speculation that both machines will likely pop up post-Lion. We suppose there's also a possibility that Apple's ready to send the old workhorse to the glue factory, but we'd prefer a happy ending.
White MacBook supplies very low
Students looking forward to picking up a white MacBook are finding that supplies of the bleached 'Books are limited. According to a post on AppleInsider, stocks of MacBooks are sold out at many authorized Apple resellers, including Amazon, MacConnection, and J&R. Other resellers are reporting low inventories as well. Apple has recently discounted the price of the MacBook for education buyers from $949 to $899, which could account for the reduction in availability. The Mac rumor mill hasn't been buzzing with talk about a refresh of the MacBook, although Apple would be expected to hold back introductions of any new Mac products until Mac OS X Lion ships in July. A back room discussion with other TUAW bloggers brought up an interesting idea -- since the MacBook Air is extremely popular, could Apple be bringing the polycarbonate body MacBook line to an end? The base price for the MacBook is $999, with a 13" display, a SuperDrive, 2.4 GHz Core 2 Duo processor, Nvidia GeForce 320m graphics processor, 2 GB of RAM and a 250 GB hard drive. The base price for a 13" MacBook Air is $1299, although with a slower 1.86 GHz Core 2 Duo processor, the same graphics processor, 2 GB of RAM, a 128 GB SSD, and no SuperDrive. A drop in the price of the 13" MacBook Air could make it a worthy successor to the MacBook, and the expected move to the new Intel Sandy Bridge processors could bring processing power in line with the venerable MacBook. What do you think, TUAW readers? Is the white MacBook nearing end of life? Will the MacBook Air reign supreme as Apple's entry-level laptop? Leave your comments below.
Samsung's new AMOLED production line should help ease smartphone display shortages
AMOLED displays may be in relatively short supply nowadays, but Samsung is doing its best to bridge the gap. Today, the company's Mobile Display unit announced that its 5.5th-generation AMOLED production line is now open, some two months ahead of schedule. The line uses glass substrates that are substantially larger than those found in its existing factories, allowing Samsung to increase output, while lowering costs. This increase in production comes in response to growing demand for the Galaxy S II and an AMOLED market that, according to DisplaySearch, should triple in value this year to $4.26 billion. For now, the production line is focusing on smartphone displays, since that's where demand is growing fastest, but will eventually turn its attention to tablet PC displays, as well. The new factory assembling the displays can currently churn out about three million screens per month, but is capable of ramping that up to 30 million, at full capacity. No word yet on when it will achieve this rate, but if SMD continues to boost its output, we may even see that market surplus we've been hearing about.
Labor, materials shortages could affect iPad, iPhone shipments
A rumor from Digitimes suggests Foxconn may not be able to fulfill Apple's upcoming orders for the iPad 2 and the iPhone 4. Sources from upstream component makers claim the Chinese company is facing a shortage of both labor and materials at its plant in Chengdu, China. This facility is one of several Foxconn locations that manufacture the iPad 2. The bulk of Apple's iPad supply still comes from the main Shenzen plant, but this slowdown at an auxiliary plant could prevent Apple from eliminating its iPad 2 backlog. Foxconn is reportedly assuring its customers that it will do all it can to meet its customers' orders and is working on rearranging its workforce to get back to 100 percent productivity. This rumored information contradicts comments made by Tim Cook during Apple's quarterly earnings in April. Cook was optimistic that iPad 2 production levels were on the rise and was "very confident" that Apple could "produce a very large number of iPads for the quarter." Cook also confirmed that iPhone 4 production levels were right on track to meet demand in all their markets. Either something has dramatically changed in the three weeks since this conference call, or this rumor from Digitimes is off-base.
Quality issues with LG manufactured panels to blame for iPad 2 shortage
Quality control problems with LCD panels from LG Display may have contributed to the prolonged shortage of the iPad 2. According to the report from Digitimes, early batches of the 9.7-inch panels supplied by LG had a light leak issue that limited LG's ability to meet demand. As a result, LG only produced 3.2 million panels in the first quarter of 2011, a figure that trails the four million panels produced by Samsung. This report corroborates an earlier report from IHS iSuppli that blamed the iPad 2 shortage on an unknown manufacturing problem with LCDs. LG has reportedly fixed this light leakage problem and is back on track to ramp up production this spring. Chimei Innolux is also prepping to contribute to the supply of IPS panels for the iPad 2 starting in May. If both these manufacturers can boost production, then perhaps iPad 2 supply constraints can be eased in this current quarter.
Global rare earth supply deficit should turn into a surplus by 2013, Goldman Sachs says
It looks like rare earth elements are getting slightly less rare. According to a research note released by Goldman Sachs today, the world's rare earth supply deficit will probably reach its apex this year, before converting into a surplus by 2013. Goldman's analysts constructed their projections based on evidence that many Western companies have begun building their own mines, in response to China's overwhelming market dominance. Today, the People's Republic produces about 90-percent of the world's rare earth minerals -- a group of 17 elements that are used to manufacture many of the flat screen TVs, hybrids and cellphones we've come to know and love. Over the course of the past few years, China has only consolidated its hold on the industry, thanks to economic policies aimed at nationalizing private mines and implementing restrictive export quotas. As a result, global rare earth prices have skyrocketed, forcing mining companies in the US and elsewhere to look inward and harvest their own deposits. The only downside, however, is that even if global supply spills into a surplus within the next two years, prices probably won't cool down until 2015. But at least the horizon looks brighter than it has in recent months.
Korean carriers suspend iPad 2 online sales
Korean mobile carriers SK Telecom and KT Corp have suspended online sales of the iPad 2 only a week after the product was launched. According to a report this morning, tight supplies of the tablet were responsible for the suspension. Reuters noted that the SK Telecom website is showing an apologetic message stating that "our iPad 2 inventory has been depleted and we apologize for failing to provide enough supplies due to the product's global supply shortages." While Apple is still showing wait times of only 1-2 weeks for most of the Apple online stores (including the South Korean store), it's apparent that supplies of the iPad 2 are insufficient to meet the demand from Apple and the two telecom companies. Both of the carriers are counting on tablet and smartphone sales to make up for dismal growth in voice traffic revenues.
Rumor: Ocarina of Time 3D to see limited initial release
Japanese retail news blog Sinobi (translated by Andriasang) reports Nintendo has a somewhat surprising supply strategy for its upcoming, three-dimensional remake of The Legend of Zelda: Ocarina of Time. According to the blog, Nintendo's initial shipment of the title to retailers will be "extremely small." Furthermore, Nintendo supposedly isn't letting retailers order extra units of the game, and is allotting a limited number of copies for all retailers, regardless of their respective size. It seems bananas to limit supply on the 3DS' most anticipated title to date, but Sinobi suggests this could be a reaction to the overstocking of Zelda: Spirit Tracks, which ended up in Japanese bargain bins faster than the franchise is likely used to. If that's the case, then Nintendo is forgetting one very important factor: Spirit Tracks is a pretty okay game, while Ocarina of Time is the best game ever made.
iPad 2 production shortfall cause: LCD and speaker issues
IHS iSuppli cut its forecast for yearly iPad sales following Apple's earnings conference call on April 20. iSuppli predicts the Cupertino company will ship 39.7 million iPads in 2010, a 9.1 percent reduction from its earlier forecast of 43.7 million. Apple confirmed during its earnings conference call that iPad 2 demand significantly outpaced supply. The iPad 2 flew off the shelves in Q2, and Apple sold every tablet it manufactured. According to iSuppli, Apple's manufacturing is constrained by a shortage of the new speaker that graces the iPad 2. Unknown quality concerns with the LCD display may have also played a role in this less than optimal rate of manufacturing. Demand for the iPad is expected to be strong for the rest of the year with a continuing production shortfall limiting the total yearly sales. During the Q&A session after the earnings call, Apple would not comment on when the supply of the iPad 2 would catch up with demand. Fingers crossed it happens soon so that prospective iPad owners no longer have to camp out early at their local Apple Store each day. [Via MacRumors]
Reggie Fils-Aime talks Nintendo's 3DS supply strategy
Remember how finding a Wii after its launch was more difficult than finding ... um, a thing, like -- you know what? There actually isn't an analogy that's applicable, here. It was the hardest thing to find, ever. That was a rough period to be sure, but Nintendo of America president Reggie Fils-Aime recently explained to USA Today, "We learned significant lessons from the launch of Wii and we made sure to have not only ample supply [of 3DS] in the marketplace, but we staged supply so it would not sell out." He added, "That strategy is why you didn't see massive sellouts on Nintendo 3DS." Fils-Aime explained that, even though the system sold almost 400,000 units in its first week on store shelves, it avoided sellouts largely because Nintendo "had product going direct to store and we also had product in retailers (distribution centers), so they could easily replenish when they had stores running low on inventory." The supply chain seems to be holding up pretty well -- way better than Nintendo's supply strategy for the Wii, which involved making secret wishes on falling stars that Wiis would just, like, appear.
Sony Ericsson Xperia Neo delayed to Q3, Arc and Play facing limited supply due to Japanese quake
There hasn't been much good news coming out of Japan lately and this sadly keeps up with the unhappy trend. Sony Ericsson has officially bumped the broad launch (it's already available in limited quantities) of its Xperia Neo handset to at least July, explaining the delay as the result of "supply chain disruptions." Additionally, the Xperia Arc and Play devices, two other members of the company's new Android Gingerbread family, will be available in smaller volume than expected, at least for the near term. We guess that might go some way to explaining why the Xperia Play failed to reach some UK carriers in time for its April 1st launch date. Skip past the break for a statement from Sony Ericsson, who promises to be more explicit about the situation when it delivers its latest quarterly results on April 19th.
iPad 2 ship times decrease to 2-3 weeks
Shipping times on Apple's website for new iPad 2 orders have decreased to 2-3 weeks as of this morning. That's a far cry from the 4-5 weeks that the store stated shortly after the iPad 2 went on sale. The new shipping times apply to all 18 models of the iPad -- white, black, Wi-Fi, AT&T and Verizon. It also appears that the 2-3 week shipping time is universal across Apple's online stores worldwide as UK and Australian stores, among others, are showing similar 2-3 week shipping times.
Sony CEO casually mentions he's supplying cameras to Apple
We were tempted to call it an April Fools' joke, but it seems the story's true: Sony CEO Sir Howard Stringer reportedly let slip that his company is producing cameras for the next batch of iPhones and iPads during a public interview with the Wall Street Journal. Traditionally, Apple's sourced its sensors from OmniVision, including the delightfully backside-illuminated 5 megapixel CMOS unit you'll find in the iPhone 4, but since Sony too has BSI tech and OmniVision has reportedly encountered delays, your next portable Apple product might house a Sony Exmor R sensor like the one we admired on the Xperia Arc. Mind you, that may not end up actually happening, because of the context in which Sir Howard revealed the news -- according to 9 to 5 Mac, he said that the factory producing sensors for Apple was affected by the Japanese tsunami. Oh well.
Suppliers ramp up to support iPad 2 demand
With queues still forming at 4 AM at some Apple stores, and whole countries selling out completely, demand for the iPad 2 is so high that Apple suppliers are ramping up production of its various components. AppleInsider reports that Samsung is hiring 300 new engineers for a semiconductor plant in Austin, Texas, and AU Optronics has an order to make flat panel screens (although this has not yet been confirmed). With earlier stories about other suppliers being taken on to make Apple's A5 processor and touch sensors, it does seem as if Apple is indeed ramping up production. Analyst Charlie Wolf with Needham & Company predicts Apple will make 30 million iPads this year and 40 million in 2012. Samsung alone will make something like US$7.8 billion worth of components for Apple next year, and others are looking for a share of Apple's business. With a new iPhone model expected later this year, this doesn't look like a process that's going to slow down any time soon.
Tragedy in Japan hasn't "meaningfully impacted iPad 2 supply"
The Japanese earthquake had a devastating effect on the people of Japan and temporarily shut down many manufacturing facilites. Analysts speculated this disaster might have produced a shortage of key components used in the electronics manufacturing process, but according to Piper Jaffray analyst Gene Munster, this shortage will have minimal effect on the future supply of the iPad 2. Munster expects the current shortage of the iPad 2 to continue into the June 2011 quarter, but this shortage is the result of excessive demand, not component production issues. Both the iPad and the iPhone 4 could see, at most, a one to two week delay as a result of earthquake-related shutdowns. This is good news for Apple customers looking to score an iPad 2, especially those international fans who waited in long lines today, only to walk away empty-handed. Of course, there are many problems Japan faces these days that are much more important than producing computers, but it's good to hear that this isn't another issue to deal with. A resumption of Japanese manufacturing will also help to stimulate the economy in Japan and help rebuild the devastated country.
Pricey iPad 2s showing up in online auctions
The "amazing" demand for the iPad 2 is creating a booming resellers market for those looking to flip their iPad 2. While iPad 2 units are impossible to find in stores, the internet is teeming with iPad 2s for those willing to pay any price. The 64 GB Wi-Fi + 3G model is the top of the line iPad 2 model and retails for US$829 online and in stores. A quick search of eBay uncovers auctions selling this model with a price tag as high as $4,000. While $4K may be on the high end of the scale, many units have sold for as much as $2000. This same model is also selling for between $1000 to $1500 on Craigslist in major metropolitan areas such as New York City. Even the low-end 16 GB Wi-Fi iPad 2 model is available at over-inflated prices with some sellers asking $2000 for the $499 tablet device on eBay and up to $1000 on Craigslist. If you did not score an iPad 2 on day one and still want one, what are you doing to secure your tablet device? Would you pay $1000 plus for the iPad 2, or do you prefer to stalk your local Apple store waiting for that elusive shipment of new iPad 2 inventory?
"Notable" slowdown at Foxconn manufacturing concerns Apple (Updated)
A slowdown in Foxconn's manufacturing may have a negative impact on the future supply of Apple products. According to Alex Guana of JMP Securities, "Hon Hai's (Foxconn) growth decelerated from 84% (year over year) in the month of December to 37% in January and then again to 26% in February." The reasons for this deceleration are not known, but the slowdown is concerning enough that JMP has downgraded its outlook on Apple from "Market Outperform" to "Market Perform." This unfavorable assessment is not based on the quality of Apple's products, but on Foxconn's ability to deliver an increasing number of Apple products in a timely manner. For the past year, Apple has struggled to meet demand for its popular smartphone and tablet. Both the original iPad and the iPhone 4 were plagued by shortages that forced the Cupertino company to delay the international launch of the iPad and rollout the iPhone 4 slowly to new carriers worldwide. Apple's recent earnings conference call confirmed iPhone 4 supplies are still constrained, and a slowdown by Foxconn may exacerbate this problem. It is worthy to note that this report does also consider the negative impact of the Japanese earthquake on the global supply of NAND flash and other electronics components. Until production levels in Japan can be restored, the next few months may be rough for Apple and its fans. Update: Another analyst cited by AppleInsider refutes this negative conclusion put forth by Gauna. Analyst Yair Reiner of Oppenheimer & Co. points out that Apple accounts for only 20% of Hon Hai's total sales. The link between the two companies is so small that any slowdown in Foxconn's growth will have no effect on Apple. Reiner writes, "The correlation between Apple and Hon Hai's revenue therefore appears to be a product of coincidence more than causality."
iPad 2 sells out in USA, March 25th international launch in doubt
Less than a week after its launch in the United States, the iPad 2 is simply gone. If you don't have one already, you're not likely to get one anytime soon unless you have equal measures of patience and perseverance. Apple's retail stores are occasionally (and sporadically) getting new shipments, but the lines outside stores in key markets like New York City and San Francisco are still huge. Shipping time for online iPad 2 orders has increased to 4-5 weeks. The picture is clear: demand for the iPad 2 is vastly outstripping supply. All of this has led at least one analyst to question whether Apple's scheduled March 25 international launch of the iPad 2 will still take place. After examining the current state of affairs in the U.S., Brian White of Ticonderoga Securities doubts Apple will have enough supply of the iPad 2 for an international launch. Unfortunately for Apple fans outside the States, he's most likely right. Considering how the supply/demand scenario has played out in the U.S. so far, a couple things could happen with the iPad 2's international launch. Unfortunately, neither of them are likely to satisfy international customers or do much for Apple's image. First, Apple may cite supply issues and simply move the international launch date back. I think this is the most likely scenario, mostly because there's precedent for it: the same thing happened last year with the first iPad. The other possibility is that Apple will go forward with the international launch on schedule, but with extremely limited stock. While discussing this scenario with fellow overseas TUAW colleague Richard Gaywood, I guessed that on launch day Apple might have perhaps 50,000 iPad 2 units available in the UK, where he lives. As for New Zealand, where I live, I estimated about 500 iPad 2s would make it down here -- and I was being optimistic. Given the state of affairs the last time Apple launched a major product where I live, even if the iPad 2 does make it to NZ on March 25, the launch is likely to be a debacle. Note that in both countries' cases these numbers were pulled out of the ether and formed from no evidence at all, so please don't go pitching a tent outside your local Apple Store based on my guesswork. There is of course a third possibility: the U.S. iPad 2 supply may be limited because Apple has deliberately held units back to assure a smooth(ish) international launch. Based on Apple's history of preferential treatment for the U.S. market when it comes to product launches, I find this highly unlikely. I saw this coming, so I planned accordingly: my iPad 2 is currently somewhere over the North Atlantic on its way to me, far on the other side of Earth. Unfortunately, whether the international launch happens on schedule or not, it's unlikely most would-be iPad 2 owners outside of the U.S. will be so lucky.
iPad 2 success will burst the bubble for competing tablet manufacturers
Analyst Mark Moskowitz of J.P. Morgan Research predicts the success of the iPad 2 will cause oversupply problems for competing tablet manufacturers. Moskowitz claims manufacturers looking to compete with the iPad 2 have extremely ambitious build plans that will hurt them in the long run. According to his analysis, tablet makers could build up to 65.1 million tablets in 2011, a number which greatly exceeds his estimate of 47.9 million in unit sales. This enthusiasm to duplicate the iPad's success could lead to an oversupply in tablets and components used to build these tablets. In a worst case scenario, tablet makers may have an oversupply of 51%. Moskowitz claims the iPad 2 will continue to lead the tablet market in 2011, a sentiment echoed in other reports. The J.P. Morgan analyst views the Motorola Xoom and the upcoming HP Touchpad as potential competitors to the iPad, but claims consumers may be "underwhelmed" by the remaining tablet products slated to hit the shelves in 2011.
