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Production issues with new thin display could limit Apple's initial iPad 2 supply

post #1 of 41
Thread Starter 
The new ultra-thin glass screen set to be unveiled as part of the second-generation iPad this week has "yield issues" that could result in a limited supply at launch, one Wall Street analyst has said.

Bill Shope with Goldman Sachs said in a note to investors this week that sources in Apple's overseas supply chain have indicated that the iPad 2 may be affected by production difficulties. These alleged problems could result in limited supply available at launch, for a surprising product availability that AppleInsider has heard could happen near immediately.

But while Apple may experience an initial production bottleneck, Shope also reaffirmed that Apple is not expected to experience delays in launching the iPad 2. Earlier reports suggesting a significant delay of months were separately rebuffed last week.

"It appears that Apple is once again pushing the technology envelope by making the device far thinner than the original iPad, and the iPad 2's ultra-thin glass screen is generating yield issues," the analyst wrote. "This appears to be more of a process problem as opposed to a technology problem, and we wouldn't be surprised to see volumes ramp fairly quickly as the process improves."

Shope noted that almost all of Apple's new iOS products start out with limited volumes at launch. Because of this recurring trend, he said supply constraints for the second-generation iPad "should not be a major concern" for AAPL investors.

The new iPad is widely expected to have a forward-facing camera for FaceTime video chat, along with the usual technical improvements like a faster processor and more RAM. Shope also expects the new iPad to support both GSM and CDMA wireless technology, but does not expect the product to be a 4G long-term evolution compatible device.

"As of now, we are not assuming Apple will expand the storage capacity for the iPad, which should enable the company to enjoy better product margins over time," he added.

The current financial models from Goldman Sachs project the average selling price of the iPad to be 10 percent less than the previous generation. However, he noted that iPad pricing is already more aggressive than competitors, so he does not believe a price cut is necessary for the second-generation device.

Apple is set to hold a media event on Wednesday to introduce the second-generation iPad. The event will be held at the Yerba Buena Center for the Arts in San Francisco, Calif., and AppleInsider will have full live coverage.
post #2 of 41
"Far Thinner?" This should be interesting as the original was quite thin to begin with.
post #3 of 41
Quote:
Originally Posted by AppleInsider View Post


"It appears that Apple is once again pushing the technology envelope by making the device far thinner than the original iPad, and the iPad 2's ultra-thing glass screen is generating yield issues," the analyst wrote.

This scares me. These guys usually know what they're doing, but I don't want ultra-thin glass that could be relatively easier to break if dropped to the ground.
post #4 of 41
As if Goldman Sachs had an inside man to clue them to actual production issues. Not likely...

Proud AAPL stock owner.

 

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Proud AAPL stock owner.

 

GOA

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post #5 of 41
I guess the normal procedure now is to report a problem or last minute change with an about to be released product. Apple always has a limited supply with next gen. products.
post #6 of 41
I hope supplies are tight. I want to make myself wait until April, and it may be hard to do if theyre sitting right there on the shelf!

Quote:
Originally Posted by drobforever View Post

This scares me. These guys usually know what they're doing, but I don't want ultra-thin glass that could be relatively easier to break if dropped to the ground.

The whole many-layered display-and-touch component could be thinner even if the glass is unchanged.
post #7 of 41
Quote:
Originally Posted by drobforever View Post

This scares me. These guys usually know what they're doing, but I don't want ultra-thin glass that could be relatively easier to break if dropped to the ground.

Next time you read a rumor like this and get scared bitch slap yourself in the mirror for being a sucker.

god damn- no wonder these analysts put this shit out.. mad suckers lapping it up...

post #8 of 41
Quote:
Originally Posted by Gunslinger View Post

"Far Thinner?" This should be interesting as the original was quite thin to begin with.

Awesome, I'm hoping for knifes edge thinness.
post #9 of 41
Quote:
Originally Posted by MacRR View Post

Next time you read a rumor like this and get scared bitch slap yourself in the mirror for being a sucker.

god damn- no wonder these analysts put this shit out.. mad suckers lapping it up...


Why bother to post at all if all you got is an insult and some swears. If you're gonna be nasty, at least be nasty on topic and in a non-personal way.
post #10 of 41
Quote:
the iPad 2's ultra-thing glass screen is generating yield issues," the analyst wrote. "This appears to be more of a process problem as opposed to a technology problem"

I wonder if this will lead to a raft of consumers with broken displays who get chastised by the community for setting their iPad2s down wrong.
/sarcasm
post #11 of 41
Quote:
Originally Posted by Prof. Peabody View Post

Why bother to post at all if all you got is an insult and some swears. If you're gonna be nasty, at least be nasty on topic and in a non-personal way.



what? are we in kindergarten?

There's nothing else to be said for that kind of patsy.

Should I hold his hand and perpetuate his gullibility?
post #12 of 41
wasn't there a report last week that said this report was BS?
turtles all the way up and turtles all the way down... infinite context means infinite possibility
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turtles all the way up and turtles all the way down... infinite context means infinite possibility
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post #13 of 41
Quote:
Originally Posted by MacRR View Post



what? are we in kindergarten?

There's nothing else to be said for that kind of patsy.

Should I hold his hand and perpetuate his gullibility?

No, we're adults and part of being adult is to act in a civil manner toward one another - you know, like the Golden Rule? You have no idea about how the OP was feeling at that time yet you punched him right in the face for expressing himself.

As for holding his hand, you might try a different angle: to you he's ignorant about something that you have more knowledge of, so why not teach rather than criticize?
post #14 of 41
"iPad 2's ultra-thing glass screen is generating yield issues"

Perhaps they should call it "ultra-THING"! :-)
post #15 of 41
Quote:
Originally Posted by Ecphorizer View Post

No, we're adults and part of being adult is to act in a civil manner toward one another - you know, like the Golden Rule? You have no idea about how the OP was feeling at that time yet you punched him right in the face for expressing himself.

As for holding his hand, you might try a different angle: to you he's ignorant about something that you have more knowledge of, so why not teach rather than criticize?

I see your point.

Maybe I shouldn't have treated him like a hopeless case. Here's to hoping he brings a bit more in house thinking to his brain pan as opposed to buying lock stock and barrel into anything the internet serves him.
post #16 of 41
Quote:
Originally Posted by Gunslinger View Post

"Far Thinner?" This should be interesting as the original was quite thin to begin with.

Except for the camel hump.

I expect the iPad 2 to start at a AU$599 price point in Australia. Especially considering the strength of the currency and $629 is such an odd price point.
post #17 of 41
Quote:
Originally Posted by Cpsro View Post

I wonder if this will lead to a raft of consumers with broken displays who get chastised by the community for setting their iPad2s down wrong.
/sarcasm

I'm sure some idiot will drop it from the roof of his house, claim it was from a couple feet off the ground, and want to sue Apple for his ignorance and carelessness.
post #18 of 41
Quote:
Originally Posted by dish View Post

Awesome, I'm hoping for knifes edge thinness.

iPad is... Cuisine!
post #19 of 41
Quote:
Originally Posted by Dunks View Post

Except for the camel hump.

I expect the iPad 2 to start at a AU$599 price point in Australia. Especially considering the strength of the currency and $629 is such an odd price point.

This is true. I didn't care for that portion of the design but I'm sure it had its purpose.
post #20 of 41
Quote:
Originally Posted by drobforever View Post

This scares me. These guys usually know what they're doing, but I don't want ultra-thin glass that could be relatively easier to break if dropped to the ground.

I was kind of wondering about that myself as I read the article. But I've not heard of big issues with iPad glass breaking. iPhone glass yes, but not iPad. So they may feel they have some margin to work with to make the glass itself a little thinner. In addition to making the entire display component thinner as they did in the iPhone.
post #21 of 41
Quote:
Originally Posted by nagromme View Post

I hope supplies are tight. I want to make myself wait until April, and it may be hard to do if theyre sitting right there on the shelf!



The whole many-layered display-and-touch component could be thinner even if the glass is unchanged.

Just curious...

Why did you want to wait until April?
post #22 of 41
He's probably waiting for his income tax refund.
post #23 of 41
Where is that DaHarder guy to claim that Apple leak this info to increase demand they already can't meet while also claiming it won't sell worth shit while talking out the other side of his mouth about he's already pre-ordered an iPad 2 for all the people in his neighborhood?
post #24 of 41
Quote:
Originally Posted by MacRR View Post

I see your point.

Thanks for that! Now on with the show...
post #25 of 41
Quote:
Originally Posted by MacRR View Post

I see your point.

Maybe I shouldn't have treated him like a hopeless case. Here's to hoping he brings a bit more in house thinking to his brain pan as opposed to buying lock stock and barrel into anything the internet serves him.

Apparently you don't see anyone's point at all. I can't believe you would criticize and ridicule a poster for bringing up a perfectly valid point - namely, he was concerned that the thinness would lead to breakage. This is a very on-point comment, considering that no one at Apple bothered to tell folks that the iPhone 4 would break quite easily due to the elegant glass facing, which could very well cause folks concern, considering the sizeable investment in the iPad2.

Perhaps he didn't mean "scared" but rather "concerned". You should be "concerned" enough to leave your insensitive comments out of the discussion.
post #26 of 41
Initial supplies limited, me thinks not. Apple has denied all reports of production issues. In any case I am already busting out my wallet to get one.
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post #27 of 41
This is a site that features tons of articles centered around rumor and unconfirmed and often near-hypothetical information. It seems silly to criticize someone else just because they haven't reacted to one of those rumors with complete incredulity and skepticism. If everyone simply reacted to these articles with a resounding "horseshit!" then it really wouldn't reflect too well on the fun of all of this rumor and speculation -- and such people probably wouldn't be visiting a site like this too often at all anyway.

I was going somewhere with this. Something about "don't be a mindless bully on the internet," but I'm having some trouble transitioning from the previous paragraph to just that...

...maybe I just did it.
post #28 of 41
Quote:
Originally Posted by Bagman View Post

Apparently you don't see anyone's point at all. I can't believe you would criticize and ridicule a poster for bringing up a perfectly valid point - namely, he was concerned that the thinness would lead to breakage. This is a very on-point comment, considering that no one at Apple bothered to tell folks that the iPhone 4 would break quite easily due to the elegant glass facing, which could very well cause foks concern, considering the sizeable investment in the iPad2.

Perhaps he didn't mean "scared" but rather "concerned". You should be "concerned" enough to leave your insensitive comments out of the discussion.

No, you provide an example for the point of the ridicule.

The internet headline reads "iPhone 4 82% more damaged screens than the iPhone 3GS". Wow, that's terrible and you might think that iPhone 4s are breaking right and left.

The reality is that out of a sample size of 20,000 iphone owners 3.9% of iPhone 4s suffered broken glass vs 2.1% of iPhone 3GS owners. Read the actual study and look at the data yourself.

http://www.squaretrade.com/pages/iphone4-glass-study

This does not indicate to a potential customer that "the iPhone 4 would break quite easily" unless you believe every internet headline you read. That is being gullible and will subject you to ridicule...

And if you are paranoid, particularly clumsy or like throwing your iPhone against the wall (4 min mark) for kicks then get this:

http://www.youtube.com/watch?v=F0XJtbYaEbM

Gee...despite doing stuff you'd never do to a phone and even think it should survive they managed to avoid becoming part of that 3.9% of iPhone 4 owners with broken glass.

This one doesn't look as rugged but it is slim and beach proof. It probably does a decent job at keeping you out of that 3.9% bracket for normal type drops.

http://www.mobilemag.com/2011/02/25/...ec-ruggedness/

I have no idea why anyone would be "scared" or "concerned" that Apple is dumb enough to build a product that will "break easily" regardless of how thin they make the glass. Get AppleCare and a case if you are "concerned" over your "investment". Better yet, divorce yourself from the concept that buying any electronics is an "investment".
post #29 of 41
It's not true that Apple always has limited supply of new products. Typically, this is true of first generation new products, but not subsequent generations. Otherwise, we would not see sustained sales growth. This is such simple logic that it is strange that an analyst cannot understand it.

Goldman Sachs should go "Shopping" for a new analyst to replace Mr. Shope.
post #30 of 41
Quote:
Originally Posted by GotWake View Post

Apple always has a limited supply with next gen. products.

Not true. There were lots of iPhone 4 last summer but the demand outstripped supply. The year before, there were plenty of iP3GS but again demand outstripped supply. Likewise, there were lots of new iPod nanos last fall.
post #31 of 41
Quote:
Originally Posted by Bagman View Post

Apparently......

(removed apologetic gullibility)

......Perhaps he didn't mean "scared" but rather "concerned". You should be "concerned" enough to leave your insensitive comments out of the discussion.

You are like the guy who actually tries to buy the products in all that spam going around....


I wonder when collective human consciousness will finally get over the hump and stop being manipulated as a large and currently 100% reliable gullible population out in the internet audience. Articles based on, not only speculation, but speculation that doesn't even make sense when compared to reality still somehow affect people who seem to buy anything. It's like hearing about people who still fall for sending money to "royals" in foreign countries.

I'm just saying.. it's about as entertaining as charlie sheen is right now
post #32 of 41
Quote:
Originally Posted by stelligent View Post

Not true. There were lots of iPhone 4 last summer but the demand outstripped supply. The year before, there were plenty of iP3GS but again demand outstripped supply. Likewise, there were lots of new iPod nanos last fall.

Apple has repeatedly admitted to limited supply in their quarterly earnings calls with analysts. When demand exceeds supply, that's the definition of "limited," whether it means twenty-two or 8.5 million.

"Lots" of iPhones can still mean limited supply, which is why Apple staggers their rollout to international markets over a period of many months.
post #33 of 41
insult removed
post #34 of 41
This is to drive the masses in. If they said they have millions of them then the stock wouldn't skyrocket as fast. You have to believe that you are getting something that others cannot have in order for you to get up and get one as fast as possible. It's just good business to report these things.
post #35 of 41
Quote:
Originally Posted by sheff View Post

Initial supplies limited, me thinks not. Apple has denied all reports of production issues. In any case I am already busting out my wallet to get one.

I'm sure you have readily at hand a SINGLE example of Apple responding in ANY way to any of the iPad 2 rumors, since you say they've denied all sorts of reports about it. Let's see it?
post #36 of 41
Quote:
Originally Posted by cvaldes1831 View Post

Apple has repeatedly admitted to limited supply in their quarterly earnings calls with analysts. When demand exceeds supply, that's the definition of "limited," whether it means twenty-two or 8.5 million.

"Lots" of iPhones can still mean limited supply, which is why Apple staggers their rollout to international markets over a period of many months.

Ok, I understand the source of your ignorance. No problem - i can help.

There is a difference between ongoing limited supply and limited supply at launch. The former implies, as I mentioned, demand is greater than supply. The latter means that not many are made due to production problems or due to underestimate of demand.

Got it? Glad I could help.
post #37 of 41
Quote:
Originally Posted by GotWake View Post

I guess the normal procedure now is to report a problem or last minute change with an about to be released product. Apple always has a limited supply with next gen. products.


Yeah, there will only be 8 million. not 10.

As for the rest. IF there were issues of any seriousness, Apple would have fixed them before announcing the product. So given that they are comfy with the reveal, whatever issues there might have been are likely cleared up. And either they have more than enough to release now or they will when the big day comes in a couple of weeks/month

A non tech's thoughts on Apple stuff 

(She's family so I'm a little biased)

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A non tech's thoughts on Apple stuff 

(She's family so I'm a little biased)

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post #38 of 41
If there was a 'production issue' Apple would not be holding an event on Wed. So it's safe to conclude that the rumor holds no credibility. Also we never see Goldman Sachs mentioned in any of these 'rumors', so someone found a new avenue.
post #39 of 41
Quote:
Originally Posted by stelligent View Post

Ok, I understand the source of your ignorance. No problem - i can help.

There is a difference between ongoing limited supply and limited supply at launch. The former implies, as I mentioned, demand is greater than supply. The latter means that not many are made due to production problems or due to underestimate of demand.

Got it? Glad I could help.

You didn't help because you still don't get it.

The iPad has not rolled out to all possible international markets. They don't have enough supply. Apple has been manipulating worldwide iPad distribution because they don't have enough product.

You really need to learn something about consumer electronics manufacturing and distribution. I'm glad I can help.



Apple will proceed with releasing new product, regardless of its supply constraints because they need to address the competition and cannot stop innovating. They can't take two years to fulfill demand with the same old product if they want to stay competitive. There will be ongoing limited supply of the iPad for several years. That is an aftereffect of being an innovative player in a nascent market. That's why Apple can price their products the way they do and walk away with the lion's share of the industry profits.

Apple's cellphone marketshare is something like 4% and yet they are walking away with nearly half of the industry's profits. They can charge a lot of money because they are creating a desirable product whose demand exceeds supply.
post #40 of 41
Quote:
Originally Posted by Wiggin View Post

I was kind of wondering about that myself as I read the article. But I've not heard of big issues with iPad glass breaking. iPhone glass yes, but not iPad. So they may feel they have some margin to work with to make the glass itself a little thinner. In addition to making the entire display component thinner as they did in the iPhone.

I was talking to a shop assistant (around 22 years old I guess) and brought out my 2 1/2 year old iPod touch to show him something. As I was talking he just interjected "How much was your replacement screen?" I stopped, confused. "What?" "How much was your replacement screen?". I replied that I had not replaced my screen. Flummoxed, he then asked "Do you keep it in a case then?" No, I replied. "Well, how come it's not broken then?" he demanded. "Err, probably because I look after it" I answered.

It really made me wonder. Not only are people replacing things because they are last month's technology, but perhaps because they expect to replace them in a couple of months they treat them like disposable items and so end up with broken screens.

My iPod touch has a very slight scratch on the screen and is otherwise like new (it has landed screen side down twice when accidentally dropped on the ground!). The back is very scratched of course from resting on surfaces. Similarly, my iPad screen which I received on the 26th of May last year is still flawless after being used pretty much every single day.
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