Apple and Partners Scrambling to Meet iPad 2 Demand Amid Earthquake Effects

[MacRumors]

A series of new reports indicate that Apple and its suppliers are working hard to ensure a steady flow of iPad 2 units to the market amid strong demand and continuing effects from the Japanese earthquake earlier this month.

According to DigiTimes, Apple has agreed to absorb additional part costs brought about by the earthquake in exchange for assurances that suppliers will continue providing "smooth shipments" of the needed components.Although Japan's power brownout policy is seriously affecting the operations of Japan-based upstream component makers, causing related upstream components to see price rises, since Apple has agreed to absorb all the additional costs in exchange for smooth shipments, Apple's upstream component suppliers, which purchase components from Japan, are expected to see their profitability undamaged in the short term, according to sources from upstream component makers.The move comes as Taiwan's Economic Daily News reports that Apple has signed AU Optronics as a new vendor to provide displays for the iPad 2, according to Reuters.The Economic Daily News, citing no sources for its information, said the panels' selling price will be three to four times more than regular panels of the same size, giving a big boost to AU's profit.

AU could ship 30 million of the screens in a year, it said. The order will take up over half the capacity of its plant in Taichung, central Taiwan.Finally, EE Times reports (via MacDailyNews) that Samsung is pushing forward on a $3.6 billion expansion of its facilities in Austin, Texas, looking to hire 300 new employees for its chip foundry primarily to support Apple's needs.Amid a major capital spending program, South Korea's Samsung Electronics Co. Ltd. last year moved too expand the capacity of its 300-mm fab in Austin, Texas with a $3.6 billion investment.

At the same time, Samsung has opened an R&D center in Austin. The expanded fab will now produce logic devices for Samsung's System LSI business. Previously, the Austin plant only made NAND flash memory chips. The production of those chips will continue.

Most of the production is geared for one foundry customer-Apple Inc., sources said.The hires are set to occur during the first half of this year, following 600 hires last year that brought Samung's semiconductor unit in Austin up to 1,700 employees.

Article Link: Apple and Partners Scrambling to Meet iPad 2 Demand Amid Earthquake Effects

 

[toddybody]

I can wait for mine...

 

[guitarman777]

Kudos to them for taking this approach. I certainly wouldn't mind waiting a little bit longer for this reason.

 

[Sayer]

Heck yeah, all you Cali people move to Austin. The cost of living is lower than Cali, there's a lot of tech companies here already and we are growing.

And it's just as wacky-liberal as the west coast here, you'd fit right in.

 

[notabadname]

Feel lucky to have got mine already. Surprised shipments haven't been more impacted than they are.

 

[toddybody]

Feel lucky to have got mine already. Surprised shipments haven't been more impacted than they are.

La Di Freakin' Da. Dont rub it in our face

JK Pal, glad you got yours earlier than expected! Cheers!

 

[xterratop]

Apple better get on it...

Gosh! I'm sure their other competitors like Samsung are taking advantage of this time when Apple is short on iPad2 devices. Apple better get on it. I'm still waiting for mine and can't believe that their Apple stores sell out within 15 minutes from opening. It sucks to be me!

 

[toddybody]

Gosh! I'm sure their other competitors like Samsung are taking advantage of this time when Apple is short on iPad2 devices. Apple better get on it. I'm still waiting for mine and can't believe that their Apple stores sell out within 15 minutes from opening. It sucks to be me!

I went to an Apple Store on Tuesday, hoping to snatch a 32GB Wifi only. The store opened at 10am...at 9:20 there were already 12 people in line and the Apple employees were handing out tickets. All they had were 16 and 64GB Verizon 3G models. Im starting to learn that waiting for my online shipment is the best way to get what exactly what i want...playing Sherlock Holmes to find iPad2 is getting tiresome.

 

[Yebot]

Wrong wrong wrong! There's a warehouse full of iPad 2's just sitting there! Apple won't ship them out because they want local news crews to shoot long lines at retail stores!

Because not selling product = selling more product!

/sarcasm

 

[talkingfuture]

This might be where Apple's cash mountain comes in handy as they can easily pay that bit extra to secure the supplies.

 

[Eye4Desyn]

Keep Austin employed.

 

[*LTD*]

Gosh! I'm sure their other competitors like Samsung are taking advantage of this time when Apple is short on iPad2 devices. Apple better get on it. I'm still waiting for mine and can't believe that their Apple stores sell out within 15 minutes from opening. It sucks to be me!

Taking advantage of this time to do what? Create more failure? At this point let's not talk as if this is a chance for the competition to jump all over this. There will be no viable competition for at least another year, and currently there is no real alternative to the iPad. So people who want an iPad will wait for one.

 

[plokoonpma]

All make sense but the part that Apple will pay 3 to 4 times for panel. Apple is indeed on need of parts but a move like that is crazy and desperate and Apple can be called anything but that. Even more when you consider that AU will be a the "new supplier" that wont be able to deliver the quantities other vendors ship. If Apple is taking a hit with a more that extraordinary supply chain I want to see if HP, Motorola and the rest can keep the prices of their tablets since they don't have the supply chain as Apple. The only one in my opinion that is kind of save is Samsung since they produce almost everything.

 

[Mattie Num Nums]

I finally got my iPad 2 White 64GB yesterday! Ordered it the second day.

 

[Steelers7510]

Keep Austin Weird!

 

[0815]

Good thing they have enough cash on hand to do this ... I'm sure that everybody who ordered one (or is planing to) would understand that this would be a delay caused by something out of Apples control - nice move that they absorb the additional cost even though they could make everyone wait a little bit longer (and no, those people wouldn't jump for any other competing 'pad' - they would wait a little bit longer to get what they want) ... I bet other companies are effected by this to - any word on how they handle this?

 

[Eddyisgreat]

A south korean company is bringing jobs to america, solely because of an american company (apple).

what a twist.

 

[LarryC]

Gosh! I'm sure their other competitors like Samsung are taking advantage of this time when Apple is short on iPad2 devices. Apple better get on it. I'm still waiting for mine and can't believe that their Apple stores sell out within 15 minutes from opening. It sucks to be me!

I totally agree. Millions are suffering from things like cancer, aids, poverty, homelessness, lost jobs, divorce, uncontrolled pain brought on by chronic illness, depression and anguish, but it is you who are truly suffering because your iPad 2 is gonna arrive later than expected. That is just so sad and disheartening. Perhaps the red cross will discover your plight and rush to your aid.

 

[Mattie Num Nums]

I totally agree. Millions are suffering from things like cancer, aids, poverty, homelessness, lost jobs, divorce, uncontrolled pain brought on by chronic illness, depression and anguish, but it is you who are truly suffering because your iPad 2 is gonna arrive later than expected. That is just so sad and disheartening. Perhaps the red cross will discover your plight and rush to your aid.

A bit of an over reaction don't you think?

 

[akira2501]

Qc

As long as that tightens up I am fine with whoever makes the product. It's amazing though that apple has set it's margins so high that they can absorb the price jump of 3 to 4 x an still maintain a degree of profitability.

 

[RalfTheDog]

As long as that tightens up I am fine with whoever makes the product. It's amazing though that apple has set it's margins so high that they can absorb the price jump of 3 to 4 x an still maintain a degree of profitability.

You are assuming they are making money per unit. They may be taking a hit so as not to damage their reputation. Long term, I wonder what Apple is planning? The power problems will not be going away anytime soon, it takes years to build a new plant.

 

[dethmaShine]

I totally agree. Millions are suffering from things like cancer, aids, poverty, homelessness, lost jobs, divorce, uncontrolled pain brought on by chronic illness, depression and anguish, but it is you who are truly suffering because your iPad 2 is gonna arrive later than expected. That is just so sad and disheartening. Perhaps the red cross will discover your plight and rush to your aid.

What do you think he should be doing?

Worrying for people who are suffering from AIDS, cancer? Should he just sit down at home, crying for some ABCperson cause he is suffering from Cancer?
Should he be taking care of earthquakes and hurricanes and volcanoes?
Why should he be bothered about other people not maintaining their relationships properly?

People help out by donations and prayers but that doesn't stop their work/life/habits, etc. I think iPad 2 is more important to me than a person down the road suffering from Cancer. Doctors and his family must care about him; all I can do is pray.

Hard to understand such comments from some people.

What are you doing now btw? Why are you posting on MacRumors? Why not go on a rescue operation in Japan and help out those people out? I did voluntarily and I am on a week's leave. What's up?

 

[nastebu]

Gosh! I'm sure their other competitors like Samsung are taking advantage of this time when Apple is short on iPad2 devices. Apple better get on it. I'm still waiting for mine and can't believe that their Apple stores sell out within 15 minutes from opening. It sucks to be me!

I would think competitors are facing the same problems with supply. Their problems might even be worse because Apple is buying on a larger scale and might have commitments for delivery nailed down, while other companies, just starting production or only shortly into their runs, might be negotiating new contracts (assumably forced to pay higher prices in a tight market).

 

[Krevnik]

Wirelessly posted (Mozilla/5.0 (iPhone; U; CPU iPhone OS 4_2_6 like Mac OS X; en-us) AppleWebKit/533.17.9 (KHTML, like Gecko) Version/5.0.2 Mobile/8E200 Safari/6533.18.5)

As long as that tightens up I am fine with whoever makes the product. It's amazing though that apple has set it's margins so high that they can absorb the price jump of 3 to 4 x an still maintain a degree of profitability.

You are assuming they are making money per unit. They may be taking a hit so as not to damage their reputation. Long term, I wonder what Apple is planning? The power problems will not be going away anytime soon, it takes years to build a new plant.

It's not that bad. Japan does have capacity to spare, but they use both 50Hz and 60Hz power standards. That means extra capacity from half the country can't be used to help power the other half that is in rolling blackouts without converting. Something TEPCO hasn't done the work for. It's possible to relieve the pressure in months, which I suspect the government will politely demand at this point.

 

[gnasher729]

All make sense but the part that Apple will pay 3 to 4 times for panel. Apple is indeed on need of parts but a move like that is crazy and desperate and Apple can be called anything but that.

My interpretation was that the company is now making touch-screen panels, which cost about 3 or 4 times more than ordinary non-touch LCD panels of the same size. So very good news for this company, if a huge part of their production switches from cheap old LCD screens to expensive profitable touch screens, but no indication that Apple is paying above the odds.

There is also no indication in the article whether Apple needed another supplier because others have earthquake-related problems, or if they just needed another supplier because of huge demand.