Continuing supply struggles from Japan force Apple to diversify
Apple has been forced to turn to alternative suppliers after at least one component maker in Japan has been unable to meet demand following the earthquake and tsunami disaster in Japan.
To obtain "protective components" for power supplies in its devices, Apple has turned to Taiwan's Thinking Electronic, according to DigiTimes. Previously, Apple purchased most of its protective components from Japan's Murata.
But Murata has reportedly not been able to recoup after the massive earthquake that struck Japan in March. That left Apple with no choice but to seek out other partners.
Thinking is said to be the second largest supplier of protective components for Apple, representing a total of 35 percent. Previously, Japan's Murata was the largest supplier.
Thinking addressed the Japan earthquake on its own site soon after the disaster occurred in March. It noted that the company was in "constant contact" with suppliers regarding the availability of raw material for its own products.
"(Thinking) indicates that its raw material supply chain is not affected by the incident and its product lines operate as usual," the company said. "Thinking will keep monitoring its raw material supply and market demand to ensure its best production."
Last month during his company's quarterly earnings conference call, Apple Chief Operating Officer Tim Cook said the disaster in Japan did not greatly affect his company's supply of components. He also said he did not expect the situation to have a negative impact on the company in the near future.
However, Cook also cautioned that the situation in Japan remained volatile, with aftershocks and potential power outages. He said that Apple employees were working "around the clock on contingency plans" to ensure they would be able to secure components if deals were to fall through in Japan.
Cook also said that Apple would prefer to stick with its long-term partners in Japan, if possible. He expected that to take place in most instances.
Despite Cook's comments, rumors of component issues stemming from Japan have persisted. A week ago, DigiTimes reported that Apple's overseas manufacturing partner, Foxconn, is experiencing a shortage of labor and materials at its plants in Chengdu, China.
It was said that Foxconn has experienced a shortage of power amplifiers and memory for the iPad 2. Those component issues apparently stem at least in part from the devastating earthquake that struck Japan.
To obtain "protective components" for power supplies in its devices, Apple has turned to Taiwan's Thinking Electronic, according to DigiTimes. Previously, Apple purchased most of its protective components from Japan's Murata.
But Murata has reportedly not been able to recoup after the massive earthquake that struck Japan in March. That left Apple with no choice but to seek out other partners.
Thinking is said to be the second largest supplier of protective components for Apple, representing a total of 35 percent. Previously, Japan's Murata was the largest supplier.
Thinking addressed the Japan earthquake on its own site soon after the disaster occurred in March. It noted that the company was in "constant contact" with suppliers regarding the availability of raw material for its own products.
"(Thinking) indicates that its raw material supply chain is not affected by the incident and its product lines operate as usual," the company said. "Thinking will keep monitoring its raw material supply and market demand to ensure its best production."
Last month during his company's quarterly earnings conference call, Apple Chief Operating Officer Tim Cook said the disaster in Japan did not greatly affect his company's supply of components. He also said he did not expect the situation to have a negative impact on the company in the near future.
However, Cook also cautioned that the situation in Japan remained volatile, with aftershocks and potential power outages. He said that Apple employees were working "around the clock on contingency plans" to ensure they would be able to secure components if deals were to fall through in Japan.
Cook also said that Apple would prefer to stick with its long-term partners in Japan, if possible. He expected that to take place in most instances.
Despite Cook's comments, rumors of component issues stemming from Japan have persisted. A week ago, DigiTimes reported that Apple's overseas manufacturing partner, Foxconn, is experiencing a shortage of labor and materials at its plants in Chengdu, China.
It was said that Foxconn has experienced a shortage of power amplifiers and memory for the iPad 2. Those component issues apparently stem at least in part from the devastating earthquake that struck Japan.
Comments
Geez. . .
It's become impossible to completely believe anything that company CEO's and upper management say anymore. Not specifically Apple, but just about any company. There's so much misdirection (what's that another word for?) aimed at or intended to influence audiences other than the consumer and common stockholder. Over and over they claim there were no component shortages affecting delivery, yet they've been unable to meet any of their iPad production targets so far this year. Just be honest about it. "Mother Nature" happens, so what's the big deal.
Geez. . .
Well, one could say Tim Cook was overly optimistic at worst. However, whether he was duplicitous is an open question.
On you mentioning "Yet they've been unable to meet any of their iPad production targets so far this year"... That's a little disingenuous. Nice try, but what were their iPad production targets? How do you know they haven't met it? The earthquake and tsunami was quite recent. To say they haven't been able to meet production targets "so far this year" is painting things with a very broad, bleak brush.
But having made those comments during the conference call, Tim Cook will need to report at least 6 million iPads sold in calendar Q2 2011 or there'll be discontent from various quarters. I mention 6 million as a target Apple would reasonably be targeting based on demand, sales growth and rational estimates of ramping up production. (The graph says "iPad2" but it's actually iPad and iPad2 numbers combined)
And worst of all, there's the fact that Apple and the rest of the Silicon Bandits build almost nothing here. That leaves them heavily dependent in the long run on international exchange rates and the willingness of foreign governments to accept dollars, despite our huge trade deficits. That ability to manage costs is one reason why Asian automakers have moved most of their production here.
This is only the first of troubles. The billionaire geeks in the Valley are making a big, big mistake.
But having made those comments during the conference call, Tim Cook will need to report at least 6 million iPads sold in calendar Q2 2011 or there'll be discontent from various quarters. I mention 6 million as a target Apple would reasonably be targeting based on demand, sales growth and rational estimates of ramping up production.
In looking back, you're right that the various projections of 30M up to 80M iPad2's by the end of the calendar year aren't coming from Apple themselves. I had thought Tim Cook had mentioned producing somewhere in the neighborhood of 3Million units a month by now, but don't find that in a quick search. In fact reading thru what he DID say it really amounts to nothing. Extremely vague and non-committal.
http://www.macworld.com/article/1593...ranscript.html
Thanks for bringing it to my attention.
Just about any component or device made overseas can be manufactured here but at what cost? Consumers enjoy paying $199 or less for iPhones but what would be the cost if the manufacturing was done here?
The American dollar is the defacto trading currency for a reason, it is stable and backed by a strong government.
Car and computer manufacturing are different. Compared to a car it costs far less to freight computers, phones and AppleTVs to the US and abroad.
Like a lot of others in the Silicon Valley, Apple's supply lines show a foolish lack of diversity. There's the lack of geographic diversity in their dependence on parts from Japan, despite its location in a major earthquake zone and its badly designed electrical system. There's its dependence on assembly taking place in China despite its repressive government and the possibility of political unrest. What would happen to Apple sales if that unrest meant they could get almost nothing out of China for a year or longer?
And worst of all, there's the fact that Apple and the rest of the Silicon Bandits build almost nothing here. That leaves them heavily dependent in the long run on international exchange rates and the willingness of foreign governments to accept dollars, despite our huge trade deficits. That ability to manage costs is one reason why Asian automakers have moved most of their production here.
This is only the first of troubles. The billionaire geeks in the Valley are making a big, big mistake.
Umm... what is a protective component?
One which keeps the voltage and current within specified ranges, to avoid damage
to other components.
I had thought Tim Cook had mentioned producing somewhere in the neighborhood of 3Million units a month by now, but don't find that in a quick search. In fact reading thru what he DID say it really amounts to nothing. Extremely vague and non-committal.
http://www.macworld.com/article/1593...ranscript.html
Thanks for bringing it to my attention.
As opposed to other companies talking things up only to report dismal sales figures and inventory "smoothly" sitting on shelves or in the warehouse?
Almost never under Steve Jobs has Apple said, "we are going to sell x amount of y product". The very, very rare case where they did this was when they announced the first iPhone, Steve openly mentioned the target they were aiming for, which was easily trounced.
Anyway NVidia, I saw mention of what you did (or used to do) in a post the other day. Still at all active in it?
It's become impossible to completely believe anything that company CEO's and upper management say anymore. Not specifically Apple, but just about any company. There's so much misdirection (what's that another word for?) aimed at or intended to influence audiences other than the consumer and common stockholder. Over and over they claim there were no component shortages affecting delivery, yet they've been unable to meet any of their iPad production targets so far this year. Just be honest about it. "Mother Nature" happens, so what's the big deal.
Geez. . .
Why is it more difficult to believe what Apple says about component shortages than what what Digitimes and other blog sites are saying? Have these sources been so reliable in recent months(or years)? Given the complexities involved in perfecting the manufacturing and distribution chain of a new product, is it not unreasonable to take Cook's word that the lower number of ipad2 sales through April 1 were not the result of Japan's quake(how could they be, given that the quake occurred just three weeks before the end of the quarter)?
Anyway NVidia, I saw mention of what you did (or used to do) in a post the other day. Still at all active in it?
I started off 10 years ago with web and Flash design and development. Using Macs, naturally I became very hooked on the platform and products and simply could not get enough of it.
So for the past four years I've been working with a local Apple reseller chain. Doing a variety of things but most recently training end users on basic Apple product usage and some website development. I ended the contract a few weeks ago (after a few years of exploring various alternatives and doing a bit of other consulting work) as it was time to refocus on what's next.
Currently looking at iOS and/or Android development, and/or mobile web/ web apps. Surveying the landscape, I'm seeing some significant challenges, some personal (which I can't go into at the moment), but that's where I am at.
Good video from Google I/O on the state of mobile web/ web apps for anyone that's ever done web development:
http://www.youtube.com/watch?v=vV85dNeGRhY
It is a little scary. I mean, I can hack together some JQuery, a bit of PHP and MySQL alongside some visual design skills but the level of expertise required for mobile web/ web apps is significant. Might be easier to learn iOS programming for iPhone and iPad (I've done a few tutorials on that) or Android programming (which I haven't tried). I've also invested a lot of time and energy in Flash animation and interactivity skills but that is clearly on its way out (hence my rant about no more Site of The Day on Adobe.com).
Going back to making standard websites seems not very stimulating, low paying, and not very future proof since a Facebook page for a company can be more important than a website... Although it could just be that the hype is now all about mobile, tablet, apps and "social presence" and PCs and regular websites aren't going to disappear overnight. But we are at a turning point in "computing" and I maybe need some time to sort out ideology from opportunity and wishful thinking from "real-world" income.
At the rate I'm on these forums I think maybe I should write about technology rather than develop it but I couldn't be bothered about every single new gadget and every "latest and greatest" Android phone or tablet. Plus I'd need a patient editor, there's a reason I always did better in Literature than English in school...