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Suppliers see 'frustrating' yields building Apple's 'iPad mini,' supply constraints expected

post #1 of 77
Thread Starter 
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.

iPad mini Mockup

Mockup of alleged "iPad mini." | Source: iMore


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.
post #2 of 77
Limited supply makes it more desirable.
post #3 of 77

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.

post #4 of 77
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.
post #5 of 77

If their quality control of the iPad-mini is as bad as iOS 6, even a limited supply is going to be plenty.

post #6 of 77
"That said, we believe that supply constraints will initially hold back the full sales potential during the first month or so of the launch."

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.
post #7 of 77

Retina or bust...

post #8 of 77
Quote:
Originally Posted by Harbinger View Post

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.

post #9 of 77
Are there any products Apple puts out that doesn't have supply problems? Tens of millions of devices on demand would likely stress any supply chain. The tech-heads and pundits are always claiming that Apple products aren't cutting-edge. If Apple were to use cutting-edge tech, they'd never be able to produce enough products in quantity because production yields would be unacceptable. That's the whole problem with tech-heads. They're too stupid to think properly about the reality of the situation. Maybe Apple should just lower their quality standards so components will be much easier for suppliers to make.
post #10 of 77
Quote:
Originally Posted by waldobushman View Post

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.  

post #11 of 77
It might not be individual component yields so much as assembly of the finished product.

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.
post #12 of 77
Quote:
Originally Posted by allenbf View Post

 

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.

post #13 of 77

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....

post #14 of 77

Hoarders are preparing to hoard as many as possible for resale after launch day. Music to their ears
 

post #15 of 77
Quote:
Originally Posted by drobforever View Post

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.

post #16 of 77

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.

post #17 of 77

Yield on vaporware products is serious business...   and component is causing the problem?  or is the assembly?

post #18 of 77

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"
post #19 of 77
Quote:
Originally Posted by Sasparilla View Post

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.

post #20 of 77

Sounds like the sort of false info that Apple lets leak out to increase demand for panic buying to get them before Christmas.

post #21 of 77

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!

post #22 of 77

That is why you should stick with Samsung. Tried and true supplier that gets results. 

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post #23 of 77
Quote:
Originally Posted by waldobushman View Post

If their quality control of the iPad-mini is as bad as iOS 6, even a limited supply is going to be plenty.

 

Troll needs food, badly!

post #24 of 77

iPad

iPad with Retina Display

 

iPad mini

iPad mini with Retina Display

 

Wishful thinking?

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post #25 of 77
Quote:
Originally Posted by waldobushman View Post

If their quality control of the iPad-mini is as bad as iOS 6, even a limited supply is going to be plenty.

Yup. That's why there's plenty of oversupply of the iPhone 5.

 

Go away, troll.

post #26 of 77
Quote:
Originally Posted by herbapou View Post

Yield on vaporware products is serious business...   and component is causing the problem?  or is the assembly?

It's probably the riots in China. Or is that Brazil? Or maybe there's road construction around the plants in the US and workers can't get to work. Maybe it's a shortage of cardboard for packaging. Or the FCC has been slow to approve it. Or they can't get the color quite right. Or there's a problem with the cameras and they have to redesign them.

Give it up people. We don't even know if it's a real product yet, so pretending you know something about the production status is absurd.
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post #27 of 77
Originally Posted by Evilution View Post
Sounds like the sort of false info that Apple lets leak out to increase demand for panic buying to get them before Christmas.

 

Why does that make sense to do?

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post #28 of 77
Quote:
Originally Posted by winstein2010 View Post

Limited supply makes it more desirable.


The Apple logo makes it more desirable. The playbook was limited and yet no one wanted them.

 

The analysts will claim it's a failure if it doesn't sell 5 MM in the first week or so even if it outsold every other <10" tablets.

post #29 of 77
I'm wondering if the mini will be an el cheapo design, using only trusted components (essentially the iPad 2 with a smaller scre, derived from iPhone 3GS), or if Apple thinks they can't, even with a 'low cost device', enter into the market with such old components. In which case they might go for economies of scale and use the A6 from the iPhone 5 and a non-retina in-cell screen. I hope for the latter, as my old trusted iPad 1 is in dire need of replacement.
Are there any other components where there is a similar choice?
- LTE or no? definitely don't believe in LTE
- DC-HSPA/HSPA (as with iPhone 5) or lower grade? no clue, I bet lower as the would use the latest non-LTE chip which I think did not include DC-HSPA.
- WLAN dual-band or single band? sure dual as even the iPad 1 is already dual.
- Bluetooth 4 or 2.1 EDR? Sure 2.1 would be no cheaper, so I put my money on 4.
- Micro or nano SIM? I read micro somewhere today, but I bet it'll be nano.
- Camera: 8 / 5 / less megapixel? I believe in 5 (ie no iPhone 5/4s quality, but on par with iPad 3).
post #30 of 77
Quote:
Originally Posted by winstein2010 View Post

Limited supply makes it more desirable.

This is more like

'so I'm talking bullshit and I don't want anyone to figure that out so I'm going to make up fake supplier issues'

He's making it sound like they haven't figured out how to set up their lines etc for this size device. But that would have been worked out ages ago when they prototyped the units. Especially if it was meant to be out last month

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post #31 of 77
Quote:
Originally Posted by Constable Odo View Post

Are there any products Apple puts out that doesn't have supply problems? .

That is true. If you are talking iOS and launch period, for every unit built there a at least 2 folks that want it. Nothing to do with quality of the supply etc but simple desire being way more than what is humanly possible to produce. Apple has very logical reasons for not building units for six months and warehousing them so they aren't likely to change that game supplies will always be limited at the top.

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post #32 of 77
Quote:
Originally Posted by Evilution View Post

Sounds like the sort of false info that Apple lets leak out to increase demand for panic buying to get them before Christmas.

 

You do know how sales work, right?  Apple makes money by selling products, not by producing a small quantity and hoping the hype creates a bidding war.  This isn't eBay.

post #33 of 77
Quote:
Originally Posted by Evilution View Post

Sounds like the sort of false info that Apple lets leak out to increase demand for panic buying to get them before Christmas.

Please explain the logic in that. Consider several facts:

1. Virtually all of Apples iDevices have been sold out for months after release.
2. Apple never comments on products before launch, so releasing any information would be a drastic change in policy.
3. If people really want a small tablet for Christmas and think that the iPad will be sold out, they might buy something else instead - costing Apple sales volume.

So what logic would cause Apple to fuel the media feeding frenzy on unannounced products?
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post #34 of 77
Quote:
Originally Posted by jragosta View Post


Please explain the logic in that. Consider several facts:
1. Virtually all of Apples iDevices have been sold out for months after release.
2. Apple never comments on products before launch, so releasing any information would be a drastic change in policy.
3. If people really want a small tablet for Christmas and think that the iPad will be sold out, they might buy something else instead - costing Apple sales volume.
So what logic would cause Apple to fuel the media feeding frenzy on unannounced products?

agreed. with this and others that basically say 'leaking' supply issues is 'good for business'

 

the only plausible Apple leak is the alternative 'offensive forensic' leak.  Apple is leaking misinformation to see who is leaking what to whom, and then the 'wetwork'  ensues.

post #35 of 77
Quote:
Originally Posted by 1984 View Post

iPad
iPad with Retina Display

iPad mini
iPad mini with Retina Display

Wishful thinking?

Not really.

iPad mini with E-Ink - then I'd get excited.
Something to read in direct sunlight with one hand and running off a looooong charge.
Like a high tech Kindle on iOS.
post #36 of 77
Quote:
Originally Posted by drobforever View Post

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.

 

For what it's worth the casing is very unique.  It's shaped like the plastic backs of the 3G iPhone with "hidden" curves, it also has large "lips" inside that require extensive undercutting.  It's not a shape that is typically produced by the C&C process they use for their other aluminium products.  It's a shape that typically would be moulded as the 3G backs were.  

 

This is why I originally thought that the backs would be plastic.  This shape would require significant extra work to produce in aluminium, more steps in the manufacturing process, more human handling etc. 

 

Really, really, really, wish they had gone with plastic.  Especially if this puppy turns out to be over the $250 mark or if it turns out to be a heavy brick like the iPad 3, they may regret the aluminium decision.  

post #37 of 77
Quote:
Originally Posted by Johnny 6220 View Post

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!

 

I agree with all of this.  People talking about $300 (and above) price ranges are insane.  

 

The price to hit is $200.  They could add $50 to that simply because it's an Apple product, but at $300 or above it's an immediate fail IMO.  

post #38 of 77

what exactly does 'frustrating yeilds' mean? Sounds like some BS corporate speak for 'we ain't going to have enough'. If the yeilds get more frustrated, do they turn angry or do they sit their and cry?

post #39 of 77
Originally Posted by iSheldon View Post
Something to read in direct sunlight with one hand and running off a looooong charge.
Like a high tech Kindle on iOS.

 

So an existing iPad, then.

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post #40 of 77
Quote:
Originally Posted by Gazoobee View Post

For what it's worth the casing is very unique.  It's shaped like the plastic backs of the 3G iPhone with "hidden" curves, it also has large "lips" inside that require extensive undercutting.  It's not a shape that is typically produced by the C&C process they use for their other aluminium products.  It's a shape that typically would be moulded as the 3G backs were.  

 

This is why I originally thought that the backs would be plastic.  This shape would require significant extra work to produce in aluminium, more steps in the manufacturing process, more human handling etc. 

 

Really, really, really, wish they had gone with plastic.  Especially if this puppy turns out to be over the $250 mark or if it turns out to be a heavy brick like the iPad 3, they may regret the aluminium decision.  

I'm thinking the back is extruded from a sheet of aluminum. It will be very light. The inside reinforcement truss work might actually be plastic and glued in place. In either case aluminum or plastic the case is not contributing much to the overall weight. In the example of the iPad 3, it is the laminated glass screen and the battery that are the heavy components.

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