Rumor: Apple Watch faces staggering manufacturing issues, initial production run halved
An extraordinarily dubious rumor from China suggests that Apple has been unable to solve critical issues in the manufacturing of the Apple Watch's flexible OLED display that have driven yields perilously low, while assembly partner Quanta is said to be experiencing significant issues on its production lines due to the device's small size.
Just 30 to 40 percent of the Apple Watch OLED panels rolling out of display partner LG's factories are usable, according to UDN, which has led Apple to cut its launch production targets from up to 3 million per month to around 1.5 million per month. The report was first noted by GforGames.
Manufacturing the plastic-backed flexible OLED panels is a vastly different process than the one used for glass-backed panels, the report says, requiring new methods of pulling a vacuum between the panel and the substrate. Traditional water jet vacuum pumps are said to be unsuitable, causing humidity issues.
Problems at contract manufacturer Quanta Computer, the lead assembler for the Apple Watch, are also thought to contribute to the lowered forecast. Quanta, primarily known as a computer assembler, is reportedly having trouble adapting its processes to suit the much smaller Watch.
While dramatic, this is a highly unlikely scenario. LG is among the companies that first invented flexible OLED displays, and has been shipping them at moderately high volumes for years, notably in its own G Flex handsets.
The rumored assembly problems are even more farfetched, given Apple's recently-demonstrated prowess as a manufacturer. The company is known to be deeply involved with process and tooling on its production lines, and has shown its ability to build and ship huge quantities of devices time and again with the iPhone.
This is the second report of Apple Watch yield issues to surface in as many weeks. Last week, Cowen and Company analyst Timothy Arcuri signaled that yield issues had prompted Apple to add longtime partners Foxconn and Samsung as Apple Watch suppliers.
Just 30 to 40 percent of the Apple Watch OLED panels rolling out of display partner LG's factories are usable, according to UDN, which has led Apple to cut its launch production targets from up to 3 million per month to around 1.5 million per month. The report was first noted by GforGames.
Manufacturing the plastic-backed flexible OLED panels is a vastly different process than the one used for glass-backed panels, the report says, requiring new methods of pulling a vacuum between the panel and the substrate. Traditional water jet vacuum pumps are said to be unsuitable, causing humidity issues.
Problems at contract manufacturer Quanta Computer, the lead assembler for the Apple Watch, are also thought to contribute to the lowered forecast. Quanta, primarily known as a computer assembler, is reportedly having trouble adapting its processes to suit the much smaller Watch.
While dramatic, this is a highly unlikely scenario. LG is among the companies that first invented flexible OLED displays, and has been shipping them at moderately high volumes for years, notably in its own G Flex handsets.
The rumored assembly problems are even more farfetched, given Apple's recently-demonstrated prowess as a manufacturer. The company is known to be deeply involved with process and tooling on its production lines, and has shown its ability to build and ship huge quantities of devices time and again with the iPhone.
This is the second report of Apple Watch yield issues to surface in as many weeks. Last week, Cowen and Company analyst Timothy Arcuri signaled that yield issues had prompted Apple to add longtime partners Foxconn and Samsung as Apple Watch suppliers.
Comments
What this means, if true, is that Apple has a much higher quality requirement than all the junk knockoffs coming out of China. I see it as a positive article. If Quanta can't make them, then Apple needs to find a different manufacturing company who can deal with small items. Simple as that.
Why are you publishing this?
This is just more desperate propaganda planted by Apple's competitors. It's so pathetic that they resort to this crap. It's so far below any sense of "fair play" or any concept of simply rolling up their sleeves and doing what's necessary to come up with an honest product that's as least as good as the ?Watch.
Keep in mind this is part of the reason Apple does not let people know what they are up to until they know they can do it. I personally think this is going to be a slow roll product for apple, it going to take time until they get to high numbers of shipments
I call BS.
Exactly. This is a crap rumor and a crap article.
Another Apple product going through the typical Apple product news cycle. There's always yield issues, manufacturing problems, or something the media has to report on.
The worlds' economies are still in dramatic flux. And we are supposed to be in the post PC world. Why doesn't the watch work off your iPad or iMac or MacBook too? And that little solar cell to extend its battery life is still missing.
This is no revelation. Just caution at best.
this again?! Nobody NEEDED an iPad. Remember that?
"It fits between a smartphone and a laptop, why would I need one?"
"It's just a big iPod touch, it won't sell!"
etc
You need to think of the Apple Watch as a companion to your iPhone, to improve that experience. Think of handoff and continuity. It all fit's together.
It's gonna do well. I can't wait!
Also, solar cells have tiny outputs that can JUST power a watch that tells the time. It wouldn't touch the power requirements of something as advanced as the Watch.
This needs confirmation.
I suggest asking the Log Lady from Twin Peaks.
Slow news day maybe?
As it is, anybody that has been involved in manufacturing anything know that there is a ramp up period. This ramp up can be of considerable length. This has been my experience anyways with a number of different production line start ups.
This is an odd sort of story indeed. And, it would seem Apple would certainly have a chunk of product all ready to deliver to stores. But the public reaction, if you can call it that, to the aWatch, has been little more than a yawn. Why? The number of watches "sold" in the court of public opinion is in the thousands not millions. Nothing the gear offers is needed. Everything about it is a luxury item. NOTHING about the Apple watch, at the moment, is a necessity...remembering Apple starts a product at minimum and adds features year after year....making the current model "our best ever".
The worlds' economies are still in dramatic flux. And we are supposed to be in the post PC world. Why doesn't the watch work off your iPad or iMac or MacBook too? And that little solar cell to extend its battery life is still missing.
This is no revelation. Just caution at best.
Since when does "necessary" determine what people buy? Food, water, shelter, basic clothing, health care and for some people, basic transportation is necessary. Nothing else is. And that includes a computer, Pad, iPhone, etc. If you use the 'necessary' argument, Apple wouldn't be in business.
Within some parameters of income, consumers, especially in western economies, buy what they want, not only what's necessary. If they didn't, the vast variety of consumer junk that's sold would never be sold and the economy would collapse. Apple survived the recession better than any other company. I won't pretend not to be surprised by that. I had thought that in a weak economy, consumers would turn to less-expensive products, but if you only looked at Apple's sales and earnings from October 2007 and especially after August 2008, you'd never know there was the worst recession since the market crash of 1929.
Personally, I don't want the watch. But I don't make the mistake of projecting my particular needs onto the needs/desires of others. Will this watch sell in iPhone quantities? No. But will it sell well and way beyond "thousands"? Absolutely. And if the report has any truth to it whatsoever and the Watch is in short supply? That will make people want it even more. Consumers always want what they can't have and for a product like this, they want to be first to have it, even if it will suck as compared to future versions.
As it is I've seen production lines where 40% yields have been considered good results.
I suspect that is a stretch. For one if Apple delivers in a way to meet demand then the rumors is proven false and puts the credibility of the rumor monger into question.