iPad 2 supply could be squeezed by Japanese earthquake aftermath

Suppli has published a sober, evidence-backed report outlining how the aftermath of the recent earthquake may cause supply shortages for the iPad 2, based on a teardown of the device.

Stuart Dredge
3 min read

We've been wary of writing about the question of the current situation in Japan's effect on iOS devices, because frankly, whether a bunch of westerners have to wait a while to get their iPad 2s is hardly the priority right now, when thousands of people are still missing, hundreds of thousands are displaced, and there's an ongoing nuclear emergency at the Fukushima plant.

Nevertheless... iSuppli has published a sober, evidence-backed report outlining how the aftermath of the recent earthquake may cause supply shortages for the iPad 2, based on the company's teardown of the device. After reading it, we'd be more surprised if the iPad 2's international launch isn't delayed than if it is.

"The IHS iSuppli teardown analysis of the iPad 2 so far has been able to identify five parts sourced from Japanese suppliers," explains iSuppli. "NAND flash from Toshiba Corp., dynamic random access memory (DRAM) made by Elpida Memory Inc., an electronic compass from AKM Semiconductor, the touch screen overlay glass likely from Asahi Glass Co. and the system battery from Apple Japan Inc."

iSuppli says sourcing NAND Flash and DRAM from alternative suppliers shouldn't be a headache for Apple, with Samsung potentially able to step in. It's the compass, battery and glass supply that could prove more problematic, even if in the first case, Apple finds a new supplier.

"The calibration of electronic compasses is tricky for a number of reasons," said Jérémie Bouchaud, director and principal analyst for MEMS and sensors at IHS. "Compasses are sensitive to electromagnetic interference. Furthermore, the iPad 2's compass works in close co-ordination with the tablet's accelerometer and gyroscope. This makes it impossible to simply replace one manufacturer's compass with another."

iSuppli points out that Asahi Glass has reported damage to three of its factories following the recent earthquake, with aftershocks hampering efforts for a number of Apple's suppliers to get back up to full speed.

So, here's the situation. Apple may be facing shortages of supplies for several crucial parts of the iPad 2, with some harder to source alternatives for than others. At the same time, Apple is experiencing galloping demand for its new tablet in the US, where it went on sale last week.

The iPad 2 is due to come out on Friday 25 March in the UK and 25 other countries, but at the time of writing, there is still no news on the pre-order process here.

As we said, a delay would not be a surprise, and it's hard to imagine that causing widespread anger given the circumstances. If the iPad 2 does still hit its 25 March global launch date, there is still likely to be a production bottleneck looming in the coming weeks.

If iSuppli's report makes one thing clear, it's that any iPad 2 delay will not just be using the Japanese earthquake as an excuse to divert all our devices to the US -- the disaster may cause genuine production issues for Apple.