Apple Inc. (NASDAQ:AAPL) has had a long list of problems with the Apple Watch since the company’s highly anticipated release of the device in April. From confusion with the user interface to annoyance over notification taps, the Apple Watch has seen more than it’s share of criticism. The greatest issue, at least for Apple’s executives, is the slow rate of production of the devices resulting in longer than expected delivery time for anxious buyers.
Quanta Computers Inc (TPE:2382), one of the companies widely reported to be involved in that production, released its earnings report for the first quarter on Thursday. The manufacturer allowed some very guarded information about the state of Apple Watch production to leak through and, at first glance, the news appears to be good.
Apple Watch supplies rise
In a report for Digitimes, which has a mixed track record in predicting movements at Cupertino and even closer to home in Taiwan, said that the company was confident that it could produce the smart watch comfortably at this stage. The Apple Watch has so far apparently failed initial delivery expectations because of production problems.
Opening Weekend, which analysts like Trip Chowdhry of Global Equities Research thought would see the company sell millions of units, ended up with Apple delivering just about 650,000 Apple Watches to customers. The reason for the low shipments was linked to AAC technologies, the company that made the “Force Touch” haptic engine” for the Apple Watch.
Aaron Lee and Joseph Tsai, who authored the report for Digitimes, said that Vice Chairman at Quanta Computer CC Leung, told them that “Quanta was forced to borrow manpower from other manufacturers and was only able to deliver limited shipments in the first quarter.”
Those issues have softened, however, according to the executive. “Quanta already has sufficient capacity to manufacture all the orders and should see a giant contribution from its wearable device business in the second quarter.”
Quanta did not officially recognize that it was the Apple Watch that it was referring to, but the company is widely recognized as one of the major manufacturers involved in the production of the Apple wearable.
Apple Watch targets questioned
As part of a policy of obfuscation, Apple is refusing to reveal specific numbers about the production or sale of the Apple Watch in its earnings report. Right now the company is burying data about the device in its Other segment on its accounts. If the rumors from KGI Securities and others are true, however, the company may well miss shipping estimates for the June quarter.
There’s a wide variety of estimates out there on the Apple Watch release and some, like the 8 million in 2015 forecasted by Gene Munster of Piper Jaffray, even accounted for huge production problems in the first quarter.
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