New Report Says Display Challenges Have Cut Apple Watch Shipments in Half

Apple Watch Sport BlueA new report out of Taiwanese publication Economic Daily News [Google Translate] claims that Apple has cut the expected production and shipping targets of the Apple Watch by half due to manufacturing challenges leading up to the launch of the device. (via GforGames).

The company initially planned to manufacture between 2.5 and 3 million units of the wearable per month, following its launch on April 24. A claim by Economic Daily News now states Apple has lowered expectations to produce 1.25-1.5 million Apple Watches every month.

The website cites sources within Apple's supply chain, pointing towards production snafus on the manufacturing of the Apple Watch's AMOLED display as the main culprit behind the tempered production expectations. Although it has yet to be confirmed by Apple itself, Economic Daily News claims the introduction of a new type of display used in Apple's manufacturing processes - unlike the traditional LCD screens of iPhones - has resulted in a slower production rate on the Apple Watch leading up to the device's launch.
One of the reasons for this change in plans apparently lies in manufacturing issues with the display (which is being produced by LG), leading to 30-40% yield capacity. Plastic OLED panels use PET (polyethylene terephthalate) instead of a glass substrate, thus giving them flexibility and lightweight. The only problem however, is that manufacturing plastic OLEDs requires a different method of creating a vacuum between the OLED panel and the plastic substrate, other than the traditional water jet vacuum pumps. And because PETs are very sensitive to humidity it looks like manufacturing the Watch’s display is a more complicated process than initially expected.
The source also points to slow production lines thanks to manufacturer Quanta, who has more experience in laptop manufacturing than in smaller devices like the Watch. According to Economic Daily News, Apple is already looking at expanding manufacturing options by involving Foxconn in the wearable's production process in the future.

Similar production-related stories have circulated before the launch of other Apple-related products in the past. Due to the high volume of such reports leading up to a device's launch, and no official word from Apple, today's report out of Economic Daily News remains sketchy at best.

Related Roundups: Apple Watch, watchOS 2, watchOS 3
Tag: udn.com
Buyer's Guide: Apple Watch (Caution)


Top Rated Comments

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19 months ago
EVERY apple product has "anonymous sources" that claim manufacturing issues, then lo and behold they don't happen.

Anyone remember Jim Cramer laying out how hedge funds spread misinformation to short a stock?

http://appleinsider.com/articles/09/03/13/jon_stewart_exposes_apple_stock_manipulation


"Stewart played clips of Cramer describing — shortly before the iPhone was first announced — how hedge fund managers could spread lies about the product through either gullible or willing media sources, creating either fear or excitement that would distort the company's stock, allowing the fund manager to profit."

"Fomenting the market against Apple, however, "is very easy, because the people who write about Apple want that story. And you can claim that it is credible because you spoke to someone at Apple, because Apple isn’t in [a position to comment on unannounced products]. It is an ideal short."
Rating: 14 Votes
Avatar
19 months ago

EVERY apple product has "anonymous sources" that claim manufacturing issues, then lo and behold they don't happen.

Anyone remember Jim Cramer laying out how hedge funds spread misinformation to short a stock?

http://appleinsider.com/articles/09/03/13/jon_stewart_exposes_apple_stock_manipulation


"Stewart played clips of Cramer describing — shortly before the iPhone was first announced — how hedge fund managers could spread lies about the product through either gullible or willing media sources, creating either fear or excitement that would distort the company's stock, allowing the fund manager to profit."

"Fomenting the market against Apple, however, "is very easy, because the people who write about Apple want that story. And you can claim that it is credible because you spoke to someone at Apple, because Apple isn’t in [a position to comment on unannounced products]. It is an ideal short."


This.

Before the launch of an apple product we always get rumors that there will be limited supplies . Maybe it's a tactic to drive strong pre-orders :)
Rating: 10 Votes
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19 months ago
I'll believe it when I see it. The haters say the same thing about every product around this time.
Rating: 9 Votes
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19 months ago

Not worried at all about this. Organisation is Tim Cook's strong point, so there will be plenty of Apple Watches to go round :)


Just like there were plenty of iPhone 6s and 6 Pluses to go around ?
Rating: 8 Votes
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19 months ago
What was the last Apple product that didn't have dire predictions about production issues?
Rating: 8 Votes
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19 months ago
Bottom line if you want one of these Apple Watches in the first few months of launch, get your pre-orders in on DAY ONE.
Rating: 6 Votes
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19 months ago
Murky to me. Apple is hedging its production bets under a practical excuse.
Rating: 6 Votes
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19 months ago
looks like this is going to work well for Apple's supply and demand theme :D
Rating: 5 Votes
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19 months ago

Bottom line if you want one of these Apple Watches in the first few months of launch, get your pre-orders in on DAY ONE.


This is the standard Apple pre-release hype generation strategy/playbook.

1. Create a temporary product shortage (or the impression of one)

2. Media reports on product shortages and long lines at Apple stores

3. Scarcity and media hype generates even more demand

4. After 6-8 weeks, solve production issues. Supply catches up with demand.

5. Profit!
Rating: 5 Votes
Avatar
19 months ago

Another reason to wait for Generation 2.


Razeus's purchasing plan:

Wait a year for Gen 2...

...(1 year later)
Gen 2 productions issues reported prior to preorder.

Wait a year for Gen 3...

...(1 year later)
Gen 3 productions issues reported prior to preorder.

Wait a year for Gen 4...

Etcetera...
Rating: 5 Votes
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