Continuing supply struggles from Japan force Apple to diversify
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.
11 Comments
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. . .
Umm... what is a protective component?
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)
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.
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.