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Thursday March 31, 2011 4:59 pm

Apple will absorb extra costs to ensure timely shipments of iPad 2 parts from Japan


Posted by Andru Edwards - Categories: Apple, Corporate News, Handhelds


iPad 2 parts

Apple is prepared to eat some extra costs from Japanese upstream component makers in order to avoid further shipping delays for the iPad 2.

According to a DigiTimes report, Japan has implemented a power brownout policy that is seriously hindering the production of upstream component makers in the country. However, Apple has agreed to absorb additional costs to ensure "smooth shipping" from the suppliers. In return, these Japanese companies are expected to see minimal negative affects on their profit margins.

AppleInsider pointed out an iSuppli report from earlier this month that said there are five key iPad components likely produced in Japan, including the device's battery, dynamic random access memory (DRAM), NAND flash, electronic compass, and the touch screen overlay glass.


Considering the popularity of the iPad, Apple probably doesn't want to lose any more time or money waiting on these parts. The iPad 2 went on sale in the U.S. on March 11, and analysts estimated that nearly half a million of the devices were sold during that first weekend. Additionally, the new iPad went on sale in 25 countries last week, and Brian White, a senior research analyst with Ticonderoga Securities, found that the tablet flew off store shelves.

"Our checks at Apple stores in international markets highlight a continuation of the iPad 2 stock out phenomenon found in the U.S. over the past couple of weeks, however, we believe the U.S. stores received greater volume levels (i.e., per store) during the initial selling days," he said in a Monday note.

White said the iPad 2 was sold out within hours at Apple stores in Germany, the U.K., Paris, Zurich, Toronto, and Barcelona.

Digitimes said that monthly shipments for the device are projected to hit four million units in the second quarter, and certain Japan-based suppliers have enough inventory to last through May, but not beyond that.

People in Japan, however, will have to wait a little longer to get their hands on the iPad 2. The device was originally scheduled to launch on March 25, as it did in the countries mentioned above, but it was delayed as a result of the earthquake and ensuing tsunamis that hit Japan earlier this month.

But it's not just Apple fanboys in Japan that have to wait on the iPad. In the U.S., there is about a four-five week wait for the device.

This article, written by Leslie Horn, originally appeared on PCMag.com and is republished on Gear Live with the permission of Ziff Davis, Inc.

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