Apple, other smartphone builders taking NAND that Nintendo needs for Switch production
Reports from the supply chain claim that Nintendo is suffering a component shortage for its popular Switch console, induced by Apple's need for the iPhone and other smartphone manufacturers.
First reported by the Wall Street Journal, Nintendo can't keep up with demand for the Switch because orders for Toshiba's NAND flash memory is exceeding supply industry-wide. Cited as major factors for the limited chip supply are Apple's production of the iPhone 7 and future unnamed models, other smartphone manufacturers, and data centers.
Asked for comment, a spokeswoman at Toshiba said that demand for the storage chips are "overwhelmingly greater than supply" at present. The situation is unlikely to resolve itself in 2017, according to Toshiba.
While Nintendo is no stranger to short supply at retail by accident or design, the company claims that it hopes to build 20 million units of the Switch before March 2018. Nintendo reportedly fears wide-spead "customer tantrums" should it lack available stock for the 2017 holiday season.
The Nintendo Switch launched in March, and is a touchscreen tablet with attachable controllers to the left and right of the screen. The device is set to feature integration with an official Nintendo app for iOS, though it is not yet available at launch.
The $299 console shipped around 2.74 million units in the first month of its launch, besting Nintendo's projections of 2 million units. It remains heavily constrained at retail. Nintendo shipped 13.56 million of its predecessor, the Wii U.
First reported by the Wall Street Journal, Nintendo can't keep up with demand for the Switch because orders for Toshiba's NAND flash memory is exceeding supply industry-wide. Cited as major factors for the limited chip supply are Apple's production of the iPhone 7 and future unnamed models, other smartphone manufacturers, and data centers.
Asked for comment, a spokeswoman at Toshiba said that demand for the storage chips are "overwhelmingly greater than supply" at present. The situation is unlikely to resolve itself in 2017, according to Toshiba.
While Nintendo is no stranger to short supply at retail by accident or design, the company claims that it hopes to build 20 million units of the Switch before March 2018. Nintendo reportedly fears wide-spead "customer tantrums" should it lack available stock for the 2017 holiday season.
The Nintendo Switch launched in March, and is a touchscreen tablet with attachable controllers to the left and right of the screen. The device is set to feature integration with an official Nintendo app for iOS, though it is not yet available at launch.
The $299 console shipped around 2.74 million units in the first month of its launch, besting Nintendo's projections of 2 million units. It remains heavily constrained at retail. Nintendo shipped 13.56 million of its predecessor, the Wii U.
Comments
What do you mean?
Unfortunately, Nintendo has a long, consistent history of creating very popular products but not being able to keep up with demand.
I can hear it coming.
Nintendo makes about half their revenue from hardware.
"those who are serious about software should make their own hardware"
on top of that they are the only innovators in the console industry. %99 of everything offered by competitors was ripped off from Nintendo. They should have sued the pants off Sony and Microsoft for their lazy engineering.
Nintendo is a great company with idiots running it.
examples:
making these unnecessary "limited editions" that sell like hot cakes.
NES cCassic not including a ditigal store for retro games. Easily a multi billion dollar opportunity.
completely screweing the "Wii" branding and now they have nothing. This is like Sony dropping the "PlayStation" brand or Coca Cola changing their Coca Cola soft drink name to "switch".
terrible ads.
Bad product/software events often killing their own hype on purpose. An example is revealing Switch in some random commercial and having the keynote later. Imagine if Apple revealed their products a month before their keynotes?
I used to be really into this company and their problems stick out like a sore thumb yet they do nothing about it.
Here's one such article from a half-decade ago:
Slight correction, Nintendo has history for creating artificial product scarcity which drives demand for their product and keeps consumers from going to the competitor products, Everyone wants what they can not have and what everyone is looking for. This should sound familiar, Apple plays this games very well, probably better than Nintendo.
I do believe Nintendo is having supply issue, memory always goes through these cycles, this is why it is very important to have strategic relationships with your memory suppliers and not play a price game with you supplier. If Nintendo is having this issue you can better the low end cell phone Apple is not playing the price game, because the are not in the race to the bottom so their supplier will always make sure they get what they need.
Apple will sell a quarter billion iPhones this year and demand will be scarce for many months after launch. There is nothing fabricated about Apple's demand.
I have a Switch and think it's an excellent product. It doesn't have the feel of a high end metal/glass mobile device, but that doesn't make it cheap. I think the performance is plenty adequate and the value of its portability is understated—it's fantastic to think I can easily bring and play real console games with me when I travel.
I'd be extremely happy if I had a product that sold 13.5 million units (+millions of games), and I think you'd be happy too. Relatively low selling products do not make them bad or unsustainable. In reality the Wii U was a decent system with some awesome games despite the weird and badly timed GamePad, not to mention the confusing name.