Supply chain bottleneck could delay iPad: analyst

Caroline Gabriel/Rethink Wireless
04 Mar 2010
Daily News

We are getting used to the annual spectacle of analysts falling over one another to predict what the new Apple iPhone will look like, and this year the consensus is that the vendor will go for the mass market with a lower cost version.

This would complement the new iPad, which may satisfy the cravings of high-end Apple users for new functionality; and reflect the expansion of the high-end handset segment, upwards to mobile internet devices such as tablets, and downwards to affordable smartphones.

However, the two-pronged attack on the mobile web market may be hindered somewhat by production delays on the iPad, which could confine its initial launch to the US. According to a client note from Canaccord Adams analyst Peter Misek, a “bottleneck” at Apple's manufacturing partners may limit iPad inventory when it first goes on sale.

In particular, Misek writes, “an unspecified production problem at the iPad's manufacturer, Hon Hai Precision, will likely limit the launch region to the US and the number of units available to roughly 300,000 in the month of March, far lower than the company's initial estimate of 1 million units.

“The delay in production ramp will likely impact Apple's April unit estimate of 800,000 as well. It is also possible that, given the limited number of units available in March, the launch will be delayed for a month.”

Misek still estimates that Apple will catch up and sell 1.2m iPads in fiscal year 2010 and 3.5m in 2011.

Meanwhile, another research note predicted that the annual June iPhone event would focus on a lower-cost iteration.

Morgan Stanley analysts Katy Huberty and Mathew Schneider, as reported by Dow Jones, wrote: “As we've highlighted in the past, the cost of the [iPhone] and service plan is currently the biggest barrier to incremental demand in both mature markets and emerging markets like China.”

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