Apple, Inc. this week postponed by one month the international launch of its iPad tablet computer, indicating that it has been unable to keep-up with stronger-than-expected U.S. demand. My sense is that the international launch was delayed not by unexpected U.S. demand, but by a forecast mix problem.
In a previous Supply Chain Matters posting, Apple Product Forecasting Euphoria Gone Wild, I noted the existence of pumped-up euphoria among various analysts in their predictions of iPad sales. On the Monday after the weekend launch of the iPad, Apple reported that 300,000 units had been sold either on the weekend or thru pre-orders. By Wednesday of that week, Apple indicated that more than 500,00 unit sales had been recorded, but also noted that a “large number” of pre-orders were associated with the 3G model previously scheduled to go on sale in the U.S. at the end of April. This 3G model provides connectivity with the AT&T mobile network. This is a different model with an added communication component than the initial launch unit.
A recent Wall Street Journal article (paid subscription may be required) quotes an Oppenheimer & Company analyst who indicates that “Apple is forcing suppliers to scale up on components (the large sensors for iPad’s touch screens) that have never been mass produced before.” As noted in our past posting, a teardown analysis conducted by Chipworks, iPad’s initial components are nothing unique, more related to a big iPod Touch. That implies to me that Apple’s internal supply chain planners are dealing with juggling product mix issues around the initial launch model and the follow-on 3G model. That is not uncommon with any consumer electronics provider but has very visible effects when it involves Apple because it is so closely watched. Apple suppliers are well aware of the need for rapid ramp-up but mix of components is one related to the art of forecasting demand among models.
How many and what ultimate mix of iPads actually sold in 2010 will be determined by both the vote of Apple’s consumers and the skill of Apple’s supply chain planners in planning and forecasting model mix.
How do you view this headline? Do you concur that Apple planners are dealing with a forecast mix problem?