Apple Watch faces yield issues as Apple taps Foxconn to build, Samsung to provide OLEDs - report

Posted:
in Apple Watch edited March 2015
As production of the Apple Watch ramps up ahead of its April 24 launch, Apple is apparently still facing yield issues, and continues to tweak its suppliers as it works to bring the wearable device to market.




Analyst Timothy Arcuri of Cowen and Company recently went on a trip through the tech supply chain in Asia, where he spoke with local companies about production of the Apple Watch. Those people indicated to the analyst that various yield and supply issues remain.

Detailing his findings in a note to investors, a copy of which was provided to AppleInsider, Arcuri revealed that Apple is trying to add Foxconn as an assembly partner for the Apple Watch, in an effort to boost yields.

Up until now, it had been believed that Quanta Computer was the only assembly partner for the Apple Watch, outbidding Foxconn and Inventec.

The centerpiece of the Appel Watch is an AMOLED display that is estimated to be far more costly than traditional LCD screens. On his Asia tech trip, Arcuri was led to believe that Samsung will be supplying OLED screens to Apple for the device, signaling yet another major partnership between the two heated rivals.

But while Apple has embraced OLED for the upcoming Watch, Arcuri said it's unlikely that Samsung will supply any displays for upcoming iPhone models. Arcuri said it will likely take a few more generations for Samsung's investment in in-cell touch panels to pay off and debut in an iPhone.

Finally, supply chain sources also indicated to Arcuri that a "2.0 version" of the Apple Watch will arrive later this year. The analyst didn't indicate whether the sources were referring to a software update or entirely new hardware.

While it's unlikely that Apple would revise the Apple Watch so quickly, it is rumored that the company is planning to expand the lineup with new models. Just last week, it was said that new Apple Watch models with different casing materials are expected to go into production this fall.

The current Apple Watch lineup features the aluminum Sport models, a stainless steel series, and the 18-karat gold Apple Watch Edition. Other common watch materials not yet used by Apple that could become a part of the lineup are ceramic, titanium, white gold, and platinum.
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Comments

  • Reply 1 of 25
    Isn't LG the maker of the flexble OLED panels? Or has Samsung stolen that too now?
  • Reply 2 of 25
    pmzpmz Posts: 3,433member
    Wouldn't be an upcoming product launch without yield issues.
  • Reply 3 of 25
    So as with many Apple products we'll probably end up with two screen manufacturers and one screen will be better than the other. I imagine in this case they'll put the better screen in the Watch and Edition, and put the worse screen in the Sport models.
  • Reply 4 of 25
    SpamSandwichSpamSandwich Posts: 33,407member
    Arcuri knows nothing. This rumor is as vague as they come.
  • Reply 5 of 25
    jungmarkjungmark Posts: 6,918member
    Always yield issues. Wasn't the 6+ going to be delayed because of yield issues. Haha
  • Reply 6 of 25
    foggyhillfoggyhill Posts: 4,767member
    Quote:

    Originally Posted by AppleInsider View Post



    As production of the Apple Watch ramps up ahead of its April 24 launch, Apple is apparently still facing yield issues, and continues to tweak its suppliers as it works to bring the wearable device to market.

     





    Analyst Timothy Arcuri of Cowen and Company recently went on a trip through the tech supply chain in Asia, where he spoke with local companies about production of the Apple Watch. Those people indicated to the analyst that various yield and supply issues remain.



    Detailing his findings in a note to investors, a copy of which was provided to AppleInsider, Arcuri revealed that Apple is trying to add Foxconn as an assembly partner for the Apple Watch, in an effort to boost yields.



    Up until now, it had been believed that Quanta Computer was the only assembly partner for the Apple Watch, outbidding Foxconn and Inventec.



    The centerpiece of the Appel Watch is an AMOLED display that is estimated to be far more costly than traditional LCD screens. On his Asia tech trip, Arcuri was led to believe that Samsung will be supplying OLED screens to Apple for the device, signaling yet another major partnership between the two heated rivals.



    But while Apple has embraced OLED for the upcoming Watch, Arcuri said it's unlikely that Samsung will supply any displays for upcoming iPhone models. Arcuri said it will likely take a few more generations for Samsung's investment in in-cell touch panels to pay off and debut in an iPhone.



    Finally, supply chain sources also indicated to Arcuri that a "2.0 version" of the Apple Watch will arrive later this year. The analyst didn't indicate whether the sources were referring to a software update or entirely new hardware.



    While it's unlikely that Apple would revise the Apple Watch so quickly, it is rumored that the company is planning to expand the lineup with new models. Just last week, it was said that new Apple Watch models with different casing materials are expected to go into production this fall.



    The current Apple Watch lineup features the aluminum Sport models, a stainless steel series, and the 18-karat gold Apple Watch Edition. Other common watch materials not yet used by Apple that could become a part of the lineup are ceramic, titanium, white gold, and platinum.

     

    Oh, right, yield issue (isn't this always the case pre-launch), AKA, we will produce/sell so much we may break the machines... Bring on the yield crunch ;-).

  • Reply 7 of 25
    jbdragonjbdragon Posts: 2,246member

    Nothing like another dumb RUMOR!  Most RUMORS are just a load of PooPoo.  

  • Reply 8 of 25
    shardshard Posts: 96member
    The last few iPhones had "yield issues" too and yet they launched with record breaking numbers, each time greater than the previous one. Something that no
    Other company is capable of doing. If that is with "yield issues", what will it be like with no issues?
  • Reply 9 of 25
    rogifanrogifan Posts: 10,669member
    Is there ever a new Apple product that isn't rumored to have supply constraints?
  • Reply 10 of 25
    pmz wrote: »
    Wouldn't be an upcoming product launch without yield issues.

    Agreed 100%!
  • Reply 11 of 25
    jbdragon wrote: »
    Nothing like another dumb RUMOR!  Most RUMORS are just a load of PooPoo.  

    Agreed. The rumor Samsung won the A9 has been poopooed by Cowen, yet AppleInsider has chosen not to publish it. I guess the Samsung rumor makes AppleInsider feel comfortable.
  • Reply 12 of 25
    tooltalktooltalk Posts: 766member
    Quote:
    Originally Posted by TheWhiteFalcon View Post



    Isn't LG the maker of the flexble OLED panels? Or has Samsung stolen that too now?

     

    @thewhitebeaner : Samsung is pretty much the only game in mobile OLED display biz and has been pretty much from the getgo.  Their marketshare for AMOLED, for instance, is still around 90% or so and LG and other competitors are still trying to catch up. Samsung is also the largest consumers of mobile OLED displays. 

     

    Once again, Apple is crawling back to Samsung for parts.. 

  • Reply 13 of 25
    Quote:

    Originally Posted by tooltalk View Post

     

     

    @thewhitebeaner : Samsung's always had the lead on mobile OLED panels pretty much from the getgo.  Their marketshare for AMOLED, for instance, is still around 90% or so -- they are the largest producers and consumers of mobile OLED displays. 

     

    Once again, Apple is crawling back to Samsung for parts.. 


     

    It is what Samsung does best.  

     

    With their recent drop in profits from mobile, they are back to making more from components than selling smartphones and tablets.  Apple being by FAR their largest customer.  

  • Reply 14 of 25
    19831983 Posts: 1,225member
    Maybe the rumored new case materials include high quality polycarbonate as used on the 5C for an even more affordable version than the Sport? That could be big in less affluent markets.
  • Reply 15 of 25

    Apple Anal-cyst template:

     

    As Apple ramps up production of [product name] for its release in [Release date], our sources in the supply chain are indicating that APple is still facing yield issues. 

  • Reply 16 of 25
    mrshowmrshow Posts: 158member
    Quote:

    Originally Posted by pmz View Post



    Wouldn't be an upcoming product launch without yield issues.



    Right! Every new product gets this story. haha

  • Reply 17 of 25

    I wish Apple could stop feeding Samesung.

  • Reply 18 of 25
    Arcuri knows nothing. This rumor is as vague as they come.

    True. He's not "well-connected" ;)
  • Reply 19 of 25
    gilly33gilly33 Posts: 392member
    I share everyone's sentiment. Same old BS different day. So what else is new coming from this schmuck (analyst that is).
  • Reply 20 of 25
    sflocalsflocal Posts: 5,943member

    There must be a template that AI uses.  It's always the same tune.  "Apple experiencing yield issues for <insert Apple product here>"

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