As the Cupertino California company prepares to launch the Apple Watch on April 24, the company appears to be facing yield issues as it continues to tweak its suppliers as it works to bring the device to the public. The news comes from Cowen and Company analyst, Timothy Arcuri, who went on a trip through the tech supply chain in Asia, speaking with local companies about the production of the Apple Watch. The companies indicated that various yield and supply issues continue to remain present as of right now.
In a note to his investors, Arcuri reveals that Apple seems to be trying to add Foxconn as an assembly partner for the Apple Watch in an effort to boost yields. Up until now, Quanta Computer was the only assembly partner for the Apple Watch as the company outbid Foxconn and Inventec.
One of the reasons that the Apple Watch appears to be facing yield issues is because the centerpiece of the device is an AMOLED display that is estimated to be far more costly than your average LCD screen (which is found in traditional watches). On his trip to Asia, Arcuri was led to believe that long-time Apple rival, Samsung, will be supplying OLED screens to Apple for the Apple Watch.
Although the OLED display has been embraced by the Cupertino California company for the Apple Watch, it’s unlikely that the same technology will be used for upcoming iPhone models. According to Arcuri, it will likely take a few more generations and improvements for Samsung’s investment in in-cell touch panels to pay off and debut in an iPhone. The one thing that Arcuri pointed out that was particularly interesting was the fact that supply chain sources indicated that a “2.0 version” of the Apple Watch was set to arrive later this year. The analyst didn’t indicate whether the sources were referring to a software update or an entirely new piece of hardware. Although it’s unlikely that Apple would revise the device in such a short timeframe, it is rumored that the company is planning to expand the lineup with new models. Rumors have already been mentioning the release of new Apple Watch models with different casing materials set to go into production later this fall.
We’ll have to see how much demand the Apple Watch stirs and how well Apple has prepared for the device launch as launch day gets closer.
Source: Cowen and Company via AppleInsider
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