Apple has reportedly cut its order for the Apple Watch in half, due to manufacturing issues with the device’s AMOLED display. According to a report from Taiwanese website Economic Daily News, the company reduced its order from a range of 2.5 to 3 million, to a revised target of 1.25 to 1.5 million.
Apparently, LG, the manufacturer of the panels, has run into difficulties with producing the smaller displays. The panels, which are flexible and made of plastic, uses polyethylene terephthalate (PET) instead of a glass substrate. To meet Apple’s specifications, LG was required to devise a new way of creating a vacuum between the substrate and the display.
The issues have supposedly led to a 30 to 40-percent yield capacity for the displays, which means that very few of the screens produced met with Apple’s quality control standards. The report alleges that the manufacturing issue was the reason why Apple put a one month gap between the March 9 Apple Watch announcement and the preorder date of April 10.
The new report is in line with an earlier leak from Cowen and Company, a financial services firm. Analyst Timothy Arcuri said that Apple is looking to tap Foxconn as its second assembly partner for the Apple Watch in an effort to increase yields. Currently, Apple’s sole assembly partner for the Apple Watch is Quanta Computer, a Taiwanese laptop manufacturer. Quanta, which also counts Dell and HP as its customers, earlier outbid Foxconn for the Apple Watch contract. Arcuri, who disseminated his findings through a note to investors, also said that he expects a “2.0” version of Apple Watch later this year.
Production rumors like this are not unique. It’s almost a ritual ahead of any Apple launch. Nonetheless, if you’re itching to get an Apple Watch, be aware that it’s going to cost you. The Apple Watch starts at $350 for the Sport version then jumps to the $10,000 Watch Edition, which is made of 18-karat gold.
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