Apple Watch production hampered by shortages related to the Taptic Engine and the OLED screen?

Apple Watch production hampered by shortages related to the Taptic Engine and the OLED screen?
KGI securities analyst Ming Chi-Kuo, who is usually a step ahead of the crowd when it comes to Apple, predicts that more than 2.3 million Apple Watches will be pre-ordered before the April 24th launch date. He says that 85% of these orders will be for the entry-level Apple Watch Sport models, with 15% going to the stainless-steel Apple Watch version. The analyst predicts that 1% of orders will be for the pricey Apple Watch Edition timepieces. He adds that less than 10% of iPhone owners have pre-ordered an Apple Watch.

Kuo wrote in a note to clients that he expects Apple to produce 2.3 million units of its smartwatch by the end of next month. But Apple has been running into some problems from the supply chain, according to the analyst. The vibration motors used for the Apple Watch's Taptic Engine have been slow to arrive from Hong Kong manufacturer AAC. The manufacturer is believed to be having problems making a motor smaller than the one employed by the iPhone. LG Display, said to be the only source of the flexible OLED display used on the watch, has been tardy in shipping out enough screens. LG's problems have centered around the color accuracy of its panel along with their lifespan.

Kuo sees Apple producing 2 million to 3 million watches a month. For the year, he sees Apple shipping 15 million to 20 million Apple Watch units, less than the Wall Street consensus of 20 million to 30 million units.

source: AppleInsider

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14 Comments

1. Tazer2365

Posts: 52; Member since: Jul 28, 2012

85+15+1=101%

4. zibbyzib2000

Posts: 221; Member since: Nov 18, 2010

Seems Legit.

2. Tazer2365

Posts: 52; Member since: Jul 28, 2012

The reason I decided to get an Apple Watch was to fit in my university. Everyone seems to have some sort of watch and well, I preferred to get myself an Apple Watch (Stainless Steel) to fit in perfectly, or at least I hope I do.

11. sgodsell

Posts: 7433; Member since: Mar 16, 2013

Tazer2365 why write posts, one right after the other, when you could have edited your last post. Also its not like Apple didn't have the time to build and keep stock of these devices on hand. Everyone saw what the Apple watch looked like over 8 months ago. What can Apple not afford to hold onto some stock for instance. Lets say each Apple watch sport cost Apple $200 to make (it will be closer to $100). The stainless steel say it will cost $250. Now if Apple were to make 2 million of each. That would mean Apple would be paying roughly $900 million dollars, for a total of 2 million sport and 2 million steel Apple watches. Now how much does Apple have in the bank again ($180-$190 billion in the bank). So Apple had over 8 months now to make their devices. Apple was testing the waters. Now Apple just comes up with excuses of production problems.

14. Tazer2365

Posts: 52; Member since: Jul 28, 2012

I just realized that! When you're working on calculus homework on your new MacBook, you don't know how the world works because you're both happy that you finally have a thin computer, but sad that you have to utilize it for calculus homework :( This is terrible. I'm thankful that none of these MacBook or Apple Watch constraints affected me. I ordered my Apple Watch as soon as it was midnight and my MacBook afterwards. One arrived earlier than expected, and the other one continues to be processed by Apple. Cheers and great calculations!

3. AppleCultist

Posts: 335; Member since: Feb 18, 2015

lol "shortages" ahahaha... More like the demand was much lower than Apple thought and they cut production by more than half so they don't get embarrassed by unsold stock. Funny thing is that even with Apple's underhanded tactics, the Watch still isn't selling out. Now they're trying to cut production even more, but are getting attacked by their suppliers. You can't just say, "Hey, I want 2.5million production a month" then say "Whoops, I want less than 500,000 a month". Someone is going to have to pay for the supplies of the 2 million watches that didn't get assembled and it seems Apple doesn't want to.

5. E.N.

Posts: 2610; Member since: Jan 25, 2009

Where are you getting your sources from? I haven't heard anything about angry suppliers.

6. TheGunnyPT

Posts: 252; Member since: Feb 12, 2015

So far most appointment sessions are full in the first launching countries in which the Watch is getting released. Many of my friends are trying to book but without any luck thus far. The watch is gonna be a tremendous success for Apple (not as much as 2nd gen will be). This will insert the smartwatch into the mainstream audience and thus increasing sales tremendously around the 2nd generation. And if everything goes the way it's going, we are going to see another revolution in web design with Smartwatches (when... Apple puts a Web Browser)

7. AppleCultist

Posts: 335; Member since: Feb 18, 2015

Apple cut production by more than half. It's not going to be successful and won't make up for the incoming profit losses in the mobile division.

8. TheGunnyPT

Posts: 252; Member since: Feb 12, 2015

We'll see. It's a "niche" audience. Maybe Apple will be able to make sucess and make it mainstream. Remember the Surface Pro line wasn't successful for 2 generations and on the third one it become successful. Maybe Apple, is playing the risk of not selling on 1st/2nd Gen.

9. AppleCultist

Posts: 335; Member since: Feb 18, 2015

Considering how laggy and terrible the Apple Watch is, I predict the 2nd gen to sell even worse than the 1st gen due to bad word-of-mouth.

10. gaming64 unregistered

Have you even tried the Apple Watch yet dumbass? It's has one of the best smartwatches on the market right now. I never seen any review about it lagging so shut your mouth you cuss.

12. sgodsell

Posts: 7433; Member since: Mar 16, 2013

Considering all 3rd party apps for their watch, actually run on the iPhone. Remember developers cannot write standalone apps for the Apple watches. Developers have to create an iPhone app with WatchKit extension. So what people perceive as apps running on the watch, are actually apps running on the iPhone. So yes, it can get laggy. This is a fact. Just face the truth.

13. thxultra

Posts: 457; Member since: Oct 16, 2014

THere are actually reviews saying some third party apps lag because they run off the phone. They also say apple is going to fix the lag issue. That being said I have to agree the apple watch is the best smart watch out right now. Can't wait to get mine. The digital crown is awesome for reading emails much better then blocking the screen with your finger. Little things like that are why apple makes great products.

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