John Paczkowski

Recent Posts by John Paczkowski

Apple "Aggressively Attacking" Supply Chain Situation in Japan

Some words of reassurance for investors worried that recent calamaties in Japan have played havok with Apple’s component supplies, bruising this quarters earnings. Relax. Apple’s got this supply chain management thing nailed, according to reports.

Ticonderoga Securities analyst Brian White says Apple has been working hard to eliminate Japan-related constraints, proactively securing components from overseas suppliers.

“Our checks are indicating that Apple is aggressively attacking the situation in Japan and immediately sent executives to suppliers to ensure adequate supply of components, while also offering upfront cash payments,” White wrote in a research bulletin. “Additionally, our contacts indicate that Apple has been in Taiwan securing component capacity with a “3 Cover” guarantee (e.g., capacity, stock and price) that could block out competitors, providing the company with further market share gain opportunities.”

White’s report lends further credence to market chatter that had Apple seeking out new vendors in Taiwan to ensure access to key components. The company was recently rumored to have tapped AU Optronics as a secondary source of iPad displays, agreeing to pay a rumored 300 percent to 400 percent premium to guarantee a steady supply. Sources said that the deal would require about half of the capacity of AU’s fifth-generation plant in central Taiwan, which could end up producing 100,000 displays daily for Apple.

Add to this Apple’s long-term strategic supply chain investments and the tendency of its customers to wait for its products rather than buying a commodity substitute and the company would appear to be on solid footing. We’ll find out for certain of April 20th, when Apple reports earnings.

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There’s a lot of attention and PR around Marissa, but their product lineup just kind of blows.

— Om Malik on Bloomberg TV, talking about Yahoo, the September issue of Vogue Magazine, and our overdependence on Google