Suppliers see 'frustrating' yields building Apple's 'iPad mini,' supply constraints expected
Development of Apple's rumored 7.85-inch iPad has been "no walk in the park for suppliers," according to one analyst, who has warned that supply will not likely be able to meet demand when the product launches.
Brian White with Topeka Capital Markets said on Thursday that he has heard suppliers have found the specifications for Apple's so-called "iPad mini" to be challenging. As a result, yields on production of the device are said to have been "frustrating."
White originally believed that Apple would launch its smaller iPad in September, but he said Thursday that the debut was pushed beyond his original expectation because of apparent yield issues in production.
"Despite continued yield challenges, the supply chain feels the much anticipated iPad Mini is on track to reach acceptable volume levels for a launch over the next month," White wrote in a note to investors. "That said, we believe that supply constraints will initially hold back the full sales potential during the first month or so of the launch."
Apple has seen similar issues with the iPhone 5, which launched last month in Apple's most aggressive global rollout ever. Estimated shipping times on the iPhone 5 remain at 3 to 4 weeks from Apple's online store in the U.S.
White believes the iPad mini will debut with a price between $250 and $300. He expects Apple will sell between 5 million and 7 million units of the new, smaller tablet in the December quarter.
"Despite the low price point, we expect Apple to maintain the iconic aesthetics of the current iPad and blow away what competitors are offering in this smaller form-factor tablet market."
Mass production of the iPad mini is currently underway at Apple's suppliers in China, The Wall Street Journal reported this week. The new device is said to have a 7.85-inch display that is smaller and lower resolution than the current 9.7-inch iPad with Retina display.
With production said to have begun on the iPad mini, a flurry of component leaks claimed to be from the new device have appeared online. Earlier Thursday, purported headphone jacks from the smaller iPad were discovered online, while a collection of parts including front and back panels, an LCD display and a nano-SIM tray were pictured on Tuesday.
Brian White with Topeka Capital Markets said on Thursday that he has heard suppliers have found the specifications for Apple's so-called "iPad mini" to be challenging. As a result, yields on production of the device are said to have been "frustrating."
White originally believed that Apple would launch its smaller iPad in September, but he said Thursday that the debut was pushed beyond his original expectation because of apparent yield issues in production.
"Despite continued yield challenges, the supply chain feels the much anticipated iPad Mini is on track to reach acceptable volume levels for a launch over the next month," White wrote in a note to investors. "That said, we believe that supply constraints will initially hold back the full sales potential during the first month or so of the launch."
Apple has seen similar issues with the iPhone 5, which launched last month in Apple's most aggressive global rollout ever. Estimated shipping times on the iPhone 5 remain at 3 to 4 weeks from Apple's online store in the U.S.
White believes the iPad mini will debut with a price between $250 and $300. He expects Apple will sell between 5 million and 7 million units of the new, smaller tablet in the December quarter.
"Despite the low price point, we expect Apple to maintain the iconic aesthetics of the current iPad and blow away what competitors are offering in this smaller form-factor tablet market."
Mass production of the iPad mini is currently underway at Apple's suppliers in China, The Wall Street Journal reported this week. The new device is said to have a 7.85-inch display that is smaller and lower resolution than the current 9.7-inch iPad with Retina display.
With production said to have begun on the iPad mini, a flurry of component leaks claimed to be from the new device have appeared online. Earlier Thursday, purported headphone jacks from the smaller iPad were discovered online, while a collection of parts including front and back panels, an LCD display and a nano-SIM tray were pictured on Tuesday.
Comments
I don't see how the yields could be 'frustrating'. The screen is smaller but it's not retina so shouldn't be hard to make. Other parts, they're essentially already in production for other iDevices.
If their quality control of the iPad-mini is as bad as iOS 6, even a limited supply is going to be plenty.
This is true of pretty much every new iOS product that Apple has launched recently.
EBay profiteers should be kept in check as people will most likely upgrade to the "new iPad" if they can't get the smaller model.
Retina or bust...
Quote:
Originally Posted by Harbinger
Lower yield? I wonder where the challenging steps are? If the rumors about reusing LCD panels from 3GS, that would not be the bottleneck. But I'm starting to doubt that one, even if it was blessed by Gruber.
Yeah, this makes zero sense unless the displays ARE retina. Unless they're just talking about the in-cell technology, but I don't think so.
Quote:
Originally Posted by waldobushman
If their quality control of the iPad-mini is as bad as iOS 6, even a limited supply is going to be plenty.
iOS 6 has been the best release of iOS thus far, in my opinion.
People will likely complain about the lack of a Retina screen on this device, but let's not forget the issues at play; could they put out a device thin and light, with a retina screen that gets the battery life people expect, AND at the price point people are expecting. No. As Gruber stated, price point may be one of the key design points of the device. If Apple feel they need to release this at $200-$300, what concessions need to be made? If they can use the 3GS screen (which is now not being used for 3GS phones anymore) then that means they don't have to push as many pixels, so they can put in the A5X and save $ there as well.
A year or two down the line, the Retina screen makes for an attractive upgrade option. And by that point, the cost of using iPhone4 LCD material will make it economically feasible as well.
Quote:
Originally Posted by allenbf
Yeah, this makes zero sense unless the displays ARE retina. Unless they're just talking about the in-cell technology, but I don't think so.
If they are retina, then they'd be reusing the displays for iPhone 5 (in cell) or iPhone 4/4S. In all cases, production is moving along, unless it is in-cell retina and they cannot keep up with iPhone 5 demand, let alone iPad mini.
Definitely seems odd unless Apple was doing a top of line technology use on the smaller iPad (which we've been led to believe they wouldn't be doing).
Apple definitely has a lot of iron's in the fire all at once....
Hoarders are preparing to hoard as many as possible for resale after launch day. Music to their ears
Quote:
Originally Posted by drobforever
I don't see how the yields could be 'frustrating'. The screen is smaller but it's not retina so shouldn't be hard to make. Other parts, they're essentially already in production for other iDevices.
the screen (if rumors are true) is the same material as the iphone 3GS, and now you need to get your quality up that you have 7x5 contiguous 'quality' glass, as opposed to 3x2, or roughly 4X better glass.
The one thing I see is 'yield on production of the device are frustrating'
That reads to me it's assembly or post-burn-in component quality. not supply (directly). If the former, maybe the robots/jigs aren't quite tuned up for the form factor. If the latter, then I suspect that they are having problems with new (non Samsung?) suppliers of chips.
Yield on vaporware products is serious business... and component is causing the problem? or is the assembly?
DigiTimes/BGR reports the problem is with the aluminum backs
Quote:
"Reports from Foxconn and Pegatron that suggest that building a black-anodized aluminum case is resulting in low yield rates because such a chassis is prone to scratching"
Quote:
Originally Posted by Sasparilla
Definitely seems odd unless Apple was doing a top of line technology use on the smaller iPad (which we've been led to believe they wouldn't be doing).
Apple definitely has a lot of iron's in the fire all at once....
I suspect they made it very light to be something you can hold in one hand and read. The yield problem could be on new very light components and not the screen like most people assume.
Sounds like the sort of false info that Apple lets leak out to increase demand for panic buying to get them before Christmas.
Fully agree, the iPad Mini (or whatever it turns out to be called) is going after the growing 7inch eReader market, it will have leverage of the Apple brand and the fact that it will be more than just an eReader hopefull a fully functional iPad gives it real buyer attraction. Price point will be critical, the lack of a Retina display will not be as crucial here as it seems, the high quality of the original iPad display masked the 1024x768 resolution somewhat and the iPad Mini with its smaller screen area will do this even more so. This will be a pivotal post Steve Jobs product launch (more so than the iPhone5) as it sees the product road map moving out of what was its original space. Should be interesting!