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Apple Admits Watch Shortage Due To Defective Supply, Not Demand

Tyler Durden's picture




 

Apple fan-boys have proclaimed the Apple Watch a screaming success as Tim Cook explained he was "generally happy" with the launch. The big driver of the impression of awesomeness was how hard it was to get one... i.e. so much demand that supply copuld not keep up. However, as The Wall Street Journal reports, it was not demand, it was instead defects that forced the company to limit supply.

It's been weak post-earnings...

 

And getting worse in the after-hours...

 

Apple Inc. is said to have found a defect in a key component of its watch during production, forcing the company to limit supply of the new device,. As The Wall Street Journal reports,

A key component of the Apple Watch made by one of two suppliers was found to be defective, prompting Apple Inc. to limit the availability of the highly anticipated new product, according to people familiar with the matter.

 

The part involved is the so-called taptic engine, designed by Apple to produce the sensation of being tapped on the wrist. After mass production began in February, reliability testing revealed that some taptic engines supplied by AAC Technologies Holdings Inc., of Shenzhen, China, started to break down over time, the people familiar with the matter said. One of those people said Apple scrapped some completed watches as a result.

 

...

 

Apple last week told some watch suppliers to slow production until June, without explaining why, according to people familiar with Apple’s supply chain. Suppliers were surprised because Apple recently said that Watch inventory was insufficient, these people said.

*  *  *

On Monday, Apple Chief Executive Tim Cook said “demand is greater than supply” for the Watch, but didn’t disclose sales or orders.

In a memo to retail-store employees earlier this month, Apple retail chief Angela Ahrendts said stores won’t get watches to sell until the end of May because of “high global interest combined with our initial supply.” New online orders will be delivered in June, Apple says on its website.

Which is true of course when you only have a handful to sell...

*  *  *

 

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Wed, 04/29/2015 - 16:52 | 6044190 Cognitive Dissonance
Cognitive Dissonance's picture

The defect was the watch couldn't tell what time it was.

<And does anyone really care?>

Wed, 04/29/2015 - 16:52 | 6044197 i_call_you_my_base
i_call_you_my_base's picture

The defect is that it's a watch.

Wed, 04/29/2015 - 17:02 | 6044257 pods
pods's picture

The truth is that North Korea hacked the systems of the company producing the parts and that is why the part sucked.

Apple watch will be a *smashing* success, just watch. Eek, two puns in one sentence.

pods

Wed, 04/29/2015 - 17:14 | 6044305 nope-1004
nope-1004's picture

Sit in front of a computer for a large part of the day, no clock on that thing.  Port my cell around as I move, but no clock on that thing either.

Sounds like I'm in the markit for a watch, but since supplies are low, I'm sitting on the sidelines with all my cash just waiting for the right time.

 

Wed, 04/29/2015 - 17:19 | 6044340 DutchBoy2015
DutchBoy2015's picture

NO clock on your computer or mobile?   LOL. thats funny shit.

Wed, 04/29/2015 - 17:27 | 6044370 AIIB
AIIB's picture

Everybody that bought one 'accidentally' dropped it on the ground & smashed it. Demand doubled. Paul Krugman is the toast of the town!

Wed, 04/29/2015 - 23:13 | 6045705 johngaltfla
johngaltfla's picture

This is a major setback for the iPorn industry....

Wed, 04/29/2015 - 21:38 | 6045379 bluskyes
bluskyes's picture

Perhaps you could suggest the i-clock to Tim Cook. It could double as a computer, or digital picture frame.

Wed, 04/29/2015 - 21:15 | 6045261 lunaticfringe
lunaticfringe's picture

I am waiting for the the Apple dildo. You stick it up your ass and it projects a safari search bar out your ear.

Wed, 04/29/2015 - 17:05 | 6044271 ParkAveFlasher
ParkAveFlasher's picture

"Demand" ... lol ...Tim, you sell out of your own branded storefronts, and you can easily "demand" open-shelf promotional distribution in agreements with tech outlets already carrying your other iProducts.  has anyone any data on pre-orders?  That's what I thought!

Wed, 04/29/2015 - 17:55 | 6044487 winchester
winchester's picture

the defect is it's an apple* (*= planned obsolescence ) product.

Wed, 04/29/2015 - 17:59 | 6044509 venturen
venturen's picture

Sony did that....well till people stopped buy Sony.

Wed, 04/29/2015 - 22:47 | 6045628 Crash Overide
Crash Overide's picture

Apple admits the iwatch is a piece of shit and a gimmick for the apple junkies, also refereed to "suckers" in other circles not know to said "suckers".

Wed, 04/29/2015 - 23:13 | 6045703 legend247
legend247's picture

I freelance over th? internet and earn about 80-85$ an hour. I was without a job for 7 months but last month my paycheck with big fat bonus was $15000 just working on my computer from my home for 5-6 hours. Here's what i have been doing... www.globe-report.com

Wed, 04/29/2015 - 16:53 | 6044201 koaj
koaj's picture

Keep production low. Tell investors and the world you sold out on day 1. Create artificial interest in a shit product.

 

Sounds like a plan

Wed, 04/29/2015 - 16:54 | 6044202 Fun Facts
Fun Facts's picture

If there's a shortage of apple watches, there's a surplus of idiots.

Wed, 04/29/2015 - 16:54 | 6044203 Weaponized Innocense
Weaponized Innocense's picture

Stumble number three I have counted just today for next quarter GDP minus the channels stuffing....

Wed, 04/29/2015 - 16:55 | 6044212 Agent P
Agent P's picture

"Apple Inc. is said to have found a defect in a key component of its watch during production, forcing the company to limit supply of the new device"

That key component being the concept, right?

Wed, 04/29/2015 - 22:25 | 6045547 buzzy_the_pirate_dog
buzzy_the_pirate_dog's picture

Or the consumer of said device is defective.

Don't they just give you a free iWatch when you buy TSLA?

Wed, 04/29/2015 - 16:56 | 6044220 TradingTroll
TradingTroll's picture

Priced to perfection is never long lasting.

Wed, 04/29/2015 - 16:56 | 6044225 Sleepless Knight
Sleepless Knight's picture

Who gives an iFuck

Wed, 04/29/2015 - 16:57 | 6044229 Weaponized Innocense
Weaponized Innocense's picture

Oh yea there was a big stumble last week too... Four minus channel stuffing eating up q2 IF it where good!!!! Off a cliff if not....
Non small stumbles!

Wed, 04/29/2015 - 16:57 | 6044230 Mister Delicious
Mister Delicious's picture

I'm a fan boy who watched ZH be wrong over and over as to apple - and seems to have a real hard on against it.

Which I just don't get - all of a sudden a giant corporation figuring out how to avoid Americna corporate taxes is bad? Are they the only company building their shit in China?

What is it?

Tell you what, the "fanboy" arguments stopped being interesting 3 years ago.

How about circling back in 1, 2, 3, 6 months to see if the stock is up or down?

Sell your apple.

Sell.. the Precious!!!

...ahem. The watch will be okay because the American people are well trained to spend money they dont have on shit they dont need. The watch will be like really nice sneakers for white people.

I'll be waiting for a price drop and second gen. A hologram for my porn would also be desirable - no way I can look at porn on a screen that size, even when I got a chubbly going.

Wed, 04/29/2015 - 17:02 | 6044258 i_call_you_my_base
i_call_you_my_base's picture

Whether the watch is a good idea has nothing to do with apple. I use mostly all apple products, and like apple, but still think it's a shitty idea and it won't sell.

Wed, 04/29/2015 - 17:12 | 6044306 Mister Delicious
Mister Delicious's picture

I thought so too, but I'm softening. People are continuing to spend.

You think Beats by Dre makes the best earphones, or Mercedes makes a better car than Ford these days?

I use a Samsung phone and tablet myself.

The real sexy here is going to be the new demands/challenges of the OS.

Wed, 04/29/2015 - 17:32 | 6044397 Gone Full Retard
Gone Full Retard's picture

Mr. Delicious Consumer. Yummy.

Wed, 04/29/2015 - 17:43 | 6044441 walküre
walküre's picture

that turquoise colored wristband has your name on it

but I'm softening.

 

Wed, 04/29/2015 - 19:22 | 6044890 Mister Delicious
Mister Delicious's picture

maybe I have something with your name on it.

Wed, 04/29/2015 - 19:41 | 6044960 LooseLee
LooseLee's picture

It is easier to thread a camel through the eye of a needle than an APPLE addict (aka 'CONSUMER') to realize the TRUTH of existence...

Wed, 04/29/2015 - 18:05 | 6044540 H H Henry P P P...
H H Henry P P P Paulson's picture

Apple is the largest company in the entire world, thus, is the one prone to the attacking.  When you lead by deplorable example, the crosshairs are on you.

Wed, 04/29/2015 - 19:23 | 6044896 Mister Delicious
Mister Delicious's picture

lots of dvs from people who, I'd wager, know much much less about the tech than I do but have even stronger opinions.

Fuck all yall bitches, as it were.

You're wrong, but by all means - vote with your pocketbooks.

Wed, 04/29/2015 - 19:36 | 6044942 LooseLee
LooseLee's picture

Its not Apple so much as it is the MORONS who worship it. If 5% of the people who worship APPLE would instead go inwardly and figure out why the world is corrupt---and resolve to correct it, the problems of injustice, violence, inequality, etc., would be eliminated. Much easier to drug yourself into a stupor with the latest fad than to confront the human condition straight up...

Wed, 04/29/2015 - 16:58 | 6044236 czarangelus
czarangelus's picture

Won't disclose sales is always the sign of a hit, especially with the tepid doublespeak following.

Wed, 04/29/2015 - 17:02 | 6044255 Arnold
Arnold's picture

Millennial speak. What else can you do with a modern degree?

Wed, 04/29/2015 - 16:59 | 6044239 Rainman
Rainman's picture

I - Watch is creepy. Hope they get sued for product discrimination by just one sonuvabitch with no arms. 

Wed, 04/29/2015 - 17:07 | 6044282 Agent P
Agent P's picture

...or Flava Flav

Wed, 04/29/2015 - 17:13 | 6044308 Gone Full Retard
Gone Full Retard's picture

Or the coo-koo up there in the coo-koo clock.

Wed, 04/29/2015 - 22:52 | 6045648 TwelveOhOne
TwelveOhOne's picture

Or ceiling kitty.

Wed, 04/29/2015 - 22:23 | 6045546 buzzy_the_pirate_dog
buzzy_the_pirate_dog's picture

or blind

Wed, 04/29/2015 - 17:02 | 6044244 Arnold
Arnold's picture

When does the ap come out that projects in Holograficatm  like they had in Star Wars in 1977?

Wed, 04/29/2015 - 17:14 | 6044317 Mister Delicious
Mister Delicious's picture

holograms plus 3d printing - the keyboards out there are getting better...

http://www.thinkgeek.com/product/1631/

Some sort of hologram Siri is probably 4/6 years away.

Wed, 04/29/2015 - 17:24 | 6044359 Automatic Choke
Automatic Choke's picture

defective "tapping" sensor?  

how about just tell the friggin' users to drop it on the floor instead of tapping it?

 

Wed, 04/29/2015 - 17:42 | 6044440 henry chucho
henry chucho's picture

When the "tapping" feature created a sensation akin to the Chinese "tap torture",and the watchband constricted around the wrist,cutting off the blood flow to the hand,Apple execs knew they had a problem..

Wed, 04/29/2015 - 17:43 | 6044446 heywood2
heywood2's picture

 

Tim Cook explained he was "generally happy" with the launch

 

Then again, he's "generally happy" with having some other guy's schlong up his ass.

Wed, 04/29/2015 - 17:51 | 6044447 tony wilson and...
tony wilson and saturn zion devils's picture

cut this constant bullying and trolling you scums.
gorge clooney elton john david soft furnishings and rock hudsons liberaces and timothy cock from apple watch are not gaymen.
WHAT THE COTTON PICKIN HELL HAS ARSE ANALISM GOT TO DO WITH ICE COOL SATURN TIME KEEPINGS.
these mens all love woman and are butch and tough like the apple fbi licenced watches

the very concept of cia kill dosing jobs for control of his company is wacky.
al gore wants us to buy the watch so we will nose when it gets hotter and colder and working out the global warmings taxes

Wed, 04/29/2015 - 18:10 | 6044576 agent default
agent default's picture

Elton John and Al Gore no less.  And I was wondering who would go out with this fountain of faggorty strapped on him.

Wed, 04/29/2015 - 17:45 | 6044453 Barnaby
Barnaby's picture

This watch is great.

Play haptic Angry Birds during a horrible meeting and you'll know what I mean.

Wed, 04/29/2015 - 18:00 | 6044504 venturen
venturen's picture

we lied a few people!

 

I call PEAK!

 

Wed, 04/29/2015 - 19:22 | 6044862 medium giraffe
medium giraffe's picture

fuckingtosh

Wed, 04/29/2015 - 19:23 | 6044898 Mister Delicious
Mister Delicious's picture

not a lot of "techies" here at ZH, eh?

jeebus.

Wed, 04/29/2015 - 20:57 | 6044948 medium giraffe
medium giraffe's picture

ZH techies - more than you might think - just not impressed by a company that churns out bog standard intel chips running some dodgy copy of linux in a laptop with shit thermal properties and a huge pricetag and then drops this non event on the market to much fanfare and tedious bullshit whilst we know that, even though this mcguffin is thus far a non-starter, we'll still be wading through streets awash with the warm semen of unbridled fanboy lust that represents nothing more that an undignified blind scrabble for status and identity by way of sub par mass produced landfill pukeware.

Wed, 04/29/2015 - 19:29 | 6044921 Mister Delicious
Mister Delicious's picture

I will concede to you contrary gentlemen, and the Tylerses, that I am troubled by the fact Jimmy Kramer is recommending APL

http://www.thestreet.com/story/13098754/1/jim-cramers-mad-money-recap-ap...

On the one hand, if you are going to be in tech stocks, APL is something you just have some of, and -relativity' is important, but it is over-priced like just about everything else.

Here's the kicker - they are over-valued *less* - relatively - than A LOT of other shit...

I see the pimples, but I can see the face, too.

Bitchez.

Thu, 04/30/2015 - 00:07 | 6045842 talisman
talisman's picture

strikes me as something that belongs in a Cracker Jack box

Thu, 04/30/2015 - 00:20 | 6045855 talisman
talisman's picture

TIMEX

TAKES A LICKING AND KEEPS ON TICKING

company keeps on ticking after 150 years or so

WWI-redesigned the pocket watch into the wristwatch

1992-came up with Indiglo

Thu, 04/30/2015 - 00:25 | 6045861 talisman
talisman's picture

A friend of mine once said "you don't lick an apple, you bite into it"...

Looks like Cook is looking for Applesuckers.

Thu, 04/30/2015 - 00:43 | 6045892 onmail
onmail's picture

Another NSA device to monitor ur movements

(And strike you down with a drone whenever )

Thu, 04/30/2015 - 03:48 | 6046076 dreadnaught
dreadnaught's picture

oh stop your pussy boy whining Tyler, and admit you own a $10,000 Rolex, with a chip that has a back door in it....

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