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Apple Inc. Watch Ships Lag At 600K On “Force Touch” Problem

Apple Inc NASDAQ:AAPL watch and iphone package deal

Apple Inc. (NASDAQ: AAPL) fans may be estimating shipments of more than 3 million units of the Apple Watch since the device over the weekend, but one analyst disagrees with that estimate. Ming Chi Kuo, of KGI securities, reckons that Apple has shipped just 631,000 Watch units in the last few days.

apple watch

The reason for the delay in getting the device to the people that bought it? Slow production of the Taptic Engine, the component that drives the “Force Touch” feature. Apple is pushing that as one of the best reasons to own the device, and one of the things that differentiates it from competing devices.

Force Touch slows apple Watch sales

Force Touch alerts Watch users to messages and Twitter updates with what feels like a tap on the wrist. The hardware that drives that is new, however, and is included in just the Apple Watch and the new 12-inch MacBook. The Taptic engine isn’t the only problem according to the report. Apparently Apple is facing labor shortages and difficulties with yields on the AMOLED screen used in the Apple Watch.

Importantly the analyst doesn’t think this is a demand problem, he thinks that Apple is having issues in the supply chain. He’s looking for a full 3.8 million Watches to be delivered in the second quarter. That’s behind the more bullish analyst estimates, like Trip Chowdhry’s 40 million in 2015, but it’s not a bad number for the company to record.

Mr. Kuo previously estimated that between 2 and 3 million Watches were actually ordered in the opening days of availability.

The Taptic engine has, at long last, been seen in the wild after the first teardowns of the Apple Watch were published on Friday April 24, the day the device shipped for the first time. iFixit’s Teardown Team was one of the first to pull the wearable computer apart. The video below shows off all of the internal components, including the Taptic Engine.

 

Apple earnings incoming

Apple will release its earnings numbers for the three months through March this afternoon after the market closes on Wall Street. The KGI analyst reckons that Apple sold 58.2 million iPhones during the quarter, ahead of the consensus number of 54 million. He’s also looking for sales of 10.1 million iPads and 4.5 million Macs.

Kuo is, perhaps, more controversial for his belief that iPhone sales have reached a peak. The analyst says that KGI remains neutral on firms that operate in the iPhone supply chain, such as Taiwan Seminconductor Manufacturing Company, because of year-on-year declines expected through the end of 2015 and the beginning of 2016.

Apple CEO Tim Cook probably is unlikely to reveal actual Watch shipments this afternoon. The executive has already stated that CFO Peter Oppenheimer will obfuscate the numbers in earnings reports from here on in.

It’s possible that the company’s executive team will decide to leak some information, however, and investors will be looking our for that in the conference call. That call will take place at 5 PM  EST on Monday, just after the company releases the earnings info.

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