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More supply chain problems for Apple

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Apple SupplyChainAfter rumors of an iPhone 5 shortage due to Apple cutting ties with supplier Samsung, the tech giant may now have another concern about its production capabilities - this time with the just-announced iPad Mini.

Apple recently announced its intentions to release a smaller version of its hit iPad, which will ship out to consumers on November 2. Demand is expected to be high, as loyal Apple customers typically order their products before they hit store shelves and this new, cheaper alternative to the iPad has been hotly anticipated for months already.

 

Potential shortage
Even though Apple avoided a shortage on iPhone 5, its strained relationship with Samsung could result in problems with the iPad Mini. The two companies have been battling over intellectual property rights, and because Samsung was previously a large Apple components supplier, that could result in disaster for the thousands of customers worldwide seeking to get their iPad Minis as fast as possible. Reports of Apple expanding its supplier base for iPad Mini parts have surfaced, causing concern regarding timely production of the new gadgets.

Even though Apple often limits the supply of a new product to build interest and get press, the iPad Mini shortage could go beyond the intentional Apple gadget restrictions and cause a problem for the company during the holiday season.

New suppliers
It's looking more likely that Samsung will no longer be one of Apple's top suppliers. Tech Eye reported that while Samsung provided the company with 15 million LCD panels in the first half of the year, that number is thought to have fallen to a mere 3 million during the third quarter. It is expected to drop even lower during the last few months of the year - to only 1.5 million units.

To make up for the lack of Samsung-produced products, Apple is seeking out new suppliers to handle the massive demands for parts. AUO and LG Display are thought to be picking up the slack and providing Apple with more LCD panels for their iPad Minis. However, AUO is already having problems producing the 7.9 inch panels for the products, and sent out just more than 100,000 of them in September.

Working with new partners can be a challenge, especially for Apple, which is attempting to rework its supply chain in the midst of a product launch. As it begins to work with these new suppliers, Apple will need to determine the procurement best practices that will help it avoid unintentional product shortages and a stalled supply chain.

Last modified on Tuesday, 30 October 2012 11:59

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