Neil Hughes
Apple is without a backup supplier for many components in the new Apple Watch, a new analysis has discovered, revealing an unusual move for a company that generally works to secure options in its supply chain.
Investment firm UBS took apart the Apple Watch to get a better idea of the supply chain behind Apple's new wrist-worn device, and found that Apple is favoring sole-sourcing for "many components."
In particular, LG Display is said to be the sole supplier for the OLED display, while TPK is the only company providing the touch sensor and lamination for the Apple Watch. In addition, USI Shanghai is the lone supplier for the systems-in-package, including the application processor and memory.
Analyst Nicholas Gaudois noted that this approach is atypical for Apple, as the company usually prefers to have multiple suppliers for key components. Doing so gives Apple the flexibility to deal with yield or production issues, and also helps to drive down prices.
Apple Chief Executive Tim Cook is known as an operations genius, flexing his supply chain might to quickly produce millions of iPhones in a short amount of time for major product launches. But the debut for the Apple Watch has been very different, with initial supply selling out immediately, and most orders yet to ship to customers, even though the product was announced well ahead of launch.
It's likely that the new technology introduced in the diminutive Apple Watch has played a part in Apple using just one company to provide certain key components for the device.
UBS also found that Broadcom is the only supplier for wireless connectivity components, Maxim is the sole company responsible for the heart rate monitor, and ADI is the lone provider of the touch panel controller. Responsibilities for the Apple Watch's "taptic engine" motor are said to be split between AAC and Nidec.
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49 Comments
Probably a smart move for a new product to control quality and variability in a new OS with required integration.
I'm sure the engineering geniuses at UBS understand Apple's supply chain gameplan better than they do. Not.
????
More importantly is the lack of Samsung from the mix! Hopefully Apple can keep them out of the supply chain for the apple watch, especially for he S1 processor
I could not care less about these constant stories about why Apple Watches are still as rare as a snowless New York winter. To me Apple failed miserably with this launch when people who ordered minutes after the pre-order period started still not have received theirs almost three weeks after the official launch date.
Now I know some will say I am just an impatient customer. I did not even order mine as early. I took it for a spin in the store and ordered on April 30th. So I do not hold my breath getting it anytime before the end of June at the earliest. But I took that chance by waiting with my order. Having people wait so long who actually bought something they did not even get to look at before, risks damaging the brand which was known not just for great products but also great product roll-outs.
Sorry for the rant. I just hope this was a one-time fumble that will not repeat itself.